Standing Committee H

[Mr. Jimmy Hood in the Chair]

Higher Education Bill

Clause 23 - Condition that may be required to be imposed by English funding bodies

Amendment proposed [this day]: No. 2, in 
clause 23, page 9, line 12, leave out paragraph (b).—[Mr. Collins.] 
 Question again proposed, That the amendment be made.

Jimmy Hood: I remind the Committee that with this we are discussing the following amendments: No. 79, in
clause 23, page 9, line 16, leave out paragraph (c). 
No. 56, in 
clause 23, page 9, line 25, leave out subsection (3) and insert— 
 '(3) A condition under this section must provide, in the event of a failure by the governing body to comply with the requirements specified in subsection (1), for the imposition by the funding body on the governing body of any financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22.'. 
No. 53, in 
clause 23, page 9, line 30, leave out 
 'required by a direction under section 35(1)(a)' 
 and insert 
 'determined by the funding body in accordance with principles specified by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22'. 
No. 54, in 
clause 23, page 9, line 34, leave out from 'requirements' to 'determined' in line 35. 
No. 4, in 
clause 23, page 9, line 38, leave out paragraph (b). 
No. 5, in 
clause 23, page 9, line 43, leave out paragraph (c). 
No. 55, in 
clause 23, page 9, line 46, leave out 
 'required by a direction under section 35(1)(a)' 
 and insert 
 'determined by the funding body in accordance with principles specified by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22'. 
No. 215, in 
clause 23, page 10, line 25, at end insert 
 'and different basic amounts may be prescribed in respect of different courses'. 
No. 264, in 
clause 23, page 10, line 25, at end insert 
 'and no different basic amounts may be prescribed in respect of different courses'. 
 No. 57, in 
clause 28, page 13, line 23, leave out 
 'the Director (as defined by section 29(1))' 
 and insert 
 'the funding body (as defined in section 22(2))'. 
No. 62, in 
clause 30, page 13, line 38, leave out 'Director' and insert 'relevant authority'. 
No. 63, in 
clause 30, page 13, line 39, leave out 'his' and insert 'its'. 
No. 64, in 
clause 35, page 16, line 2, leave out 'Director' and insert 'relevant authority'. 
No. 65, in 
clause 35, page 16, line 2, leave out from 'institution' to 'has' in line 4. 
No. 66, in 
clause 35, page 16, line 4, leave out 'that requirement' and insert 
 'a condition under section 23'. 
No. 67, in 
clause 35, page 16, line 5, leave out 'Director' and insert 'relevant authority'. 
No. 68, in 
clause 35, page 16, line 6, leave out from beginning to 'impose' in line 7. 
No. 69, in 
clause 35, page 16, line 9, leave out 'he' and insert 'the relevant authority'. 
No. 70, in 
clause 35, page 16, line 13, leave out 'Director' and insert 'relevant authority'. 
No. 72, in 
clause 38, page 17, leave out line 11.

Tim Collins: I had got one sentence out before we broke for lunch and do not intend to take much time before giving the Minister some news that I hope he will welcome. I had just said that there was cross-party consensus on the objective of widening the social mix of those who enter higher education. Where we differ is on the best means of attaining that objective. It is unfair to penalise universities for difficulties and inequalities that arise from our school system and wider social problems that affect students much earlier in life.
 Three views have been advanced in today's useful debate. One is the Government's view that there should be approved access plans with penalties, backed by the office for fair access, OFFA. Another is the Liberal Democrat view that there should be approved access plans with penalties, but without OFFA, which is a mechanistic difference. We, however, do not approve of such access plans, which is a major difference of principle. The Minister rightly said that the amendment was defective when considered in isolation. Although we do not at all question the judgment of the Chair, it had been intended that the amendment would be considered in parallel with amendment No. 1, which was not called. However, in the light of the illuminating debate, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Tim Boswell: I beg to move amendment No. 277, in
clause 23, page 9, line 18, at end insert—
 '(1A) A condition under this subsection may, at a time when an English approved plan is in force in relation to the institution, after consultation with the institution, impose such requirements as are necessary to regulate the charging of fees on students or former students which are irregular or eccentric or the charging of such sums as are tantamount to fees.'.
 In moving the amendment, which stands in my name exclusively, I must make two confessions to the Committee that, in view of their weight, I should meter out a little, although I do not mean to speak at length. 
 The intention behind the amendment is to assist the Government by enabling them to impose a further condition under which HEFCE operates in its dealings with universities and other higher education institutions. The Minister will note that the amendment would require consultation with the institutions, so the matter would not be arbitrary or completely unconsidered. The proposal to impose whatever requirements are necessary to regulate the charging of irregular or eccentric fees to students or former students is relevant, because the Bill occasionally mentions, for instance in part 1, the relationship between universities and their former students. The amendment would give the Minister another weapon, and I am sure that he will be grateful for the spirit in which that is offered. 
 I now make my first, unashamed confession, which is that I am one of those unusual Members of Parliament—you can call us nerds or anoraks if you wish, Mr. Hood—who actually enjoys the process of legislation and, dare I say it, Committee work. We like to get things right or to think about the difficulties that legislation might introduce. I understand, as I am sure we all do, the passion that the hon. Member for Nottingham, North (Mr. Allen) brings to the substantive, real-world issue of getting students more involved in the decision-making process. I do not want to revisit that issue now, save only to say that the very first piece of work that I commissioned when I took the job for real in 1992 was on the socio-economic characteristics of entry. That is something that interests me. 
 I do not seek to demean hon. Members' concerns in any way, but we have an obligation to get the legislation right, however important the issue is. It is therefore entirely appropriate to move amendments such as amendment No. 277; indeed, had it not been, I am sure that you would not have selected it, Mr. Hood. It is designed to probe the Government on how the legislation will work. If we must spend time on such matters, it will be time well spent. 
 My second confession has already been smoked out by the Minister in a response to an amendment that I tabled to clause 22. He went slightly further than my intention and suggested that I had in my mind a scenario where a higher education institution could get up to some monkey business by forming a private institution in parallel with itself, thereby escaping regulation. The confession I wish to make the to the Committee is that he is absolutely right in his analysis, and that I do have a somewhat oblique mind. 
 Reflecting on what I should say this afternoon, I realised that I have missed my vocation as a highly paid tax consultant, seeking ways to subvert the intentions of legislation. I will not go down that road now, but I hope at least to use some of those forensic skills to look at what is going on here. 
 I need to explain this amendment at three possible levels of engagement. They are important for the future conduct of the complex relationship between authority in all its forms and higher education institutions. It is essential we have a clear understanding of the matter. 
 Before we go on, for the avoidance of doubt, I would like to say that I have no evidence, nor am I looking for trouble by seeking to claim, that higher education institutions have operated since the impositions of the Teaching and Higher Education Act 1998 in anything other than an entirely responsible and straightforward way. There is no problem in this area, but it is our duty to ensure that none could arise even if some bright spark of a lawyer decided to try and exploit the legislation. 
 During my own time where the Minister is sitting, metaphorically, I had interesting discussions with officials about the support package—which in those days provided grants, but we need not go into that—for students undertaking a period of study leading to the award of a first degree. The founder of my former college, William of Wykeham, apart from being Bishop of Winchester, was no mean administrator. I bet he would have made a first-rate tax consultant in his time, as he collected rather a lot for the King. The Bishop organised matters so that young boys went to Winchester College as choristers, then went through the school and eventually moved on by osmosis to New college, Oxford. It could be argued that the whole course of life, from the age of 10 all the way through to graduation at 22, could be taken as one long period of study leading up to a degree. No higher education institution has ever done that, and I hope that any of them listening in on our deliberations would not be minded to do it, but I just warn the Minister that someone might try it on. 
 In exactly the same spirit, we may consider, without a prior agenda, whether the amendment is necessary to deal with a potential problem.

James Clappison: I am listening carefully to what my hon. Friend says about potential problems, and I note that he has conceded that no such problems have existed since 1998. However, these much higher fees will now be imposed on students.

Graham Allen: On graduates.

James Clappison: Yes, and we all have to accept that. The Government's case is that funds are being provided to try and help graduates meet those fees, but we must also accept that the fees have an effect on student perceptions and decisions. Is it not more important than ever, then, that we should be careful to
 ensure that there are no additional fees on top of those debts that might additionally influence students when they apply to universities?

Tim Boswell: That is a perfectly fair comment, coming from a real lawyer intervening on a barrack-room lawyer. I respect my hon. Friend for the spirit in which he raised that matter.
 Before we go through the specifics of the amendment, I want to stress that we need to avoid unintended consequences. We need to avoid a theoretical situation in which a higher education institution might exploit an individual student and impose unnecessary burdens that would excite concerns on the Government Benches. Equally, we need to ensure that a clever, well-advised higher education institution could not creep out from under the net of the Minister's intentions and cock a snook at them, thus devaluing and discrediting the whole process. Without prejudice as to whether the process should go ahead, it is important that it should go right. 
 The first point is a simple one. I noticed in the, as ever, helpful briefing on this—Universities UK drew my attention to it—the need to have a debate on the transposition of the provisions of the 1998 Act into this part, and indeed subsequent parts of the Bill, including the definitions clause, clause 38. Although I did not participate in that earlier legislation, I understand that it was spotted then that a fee was not the only thing that could be charged between a student and their institution, and Ministers realised that there could also be other kinds of fees in different institutions, and in particular additional or supplementary fees. The general list was set out in the 1998 Act, which has itself been updated—perhaps the Minister might want to say something about that—and is in effect being transposed into this legislation, although the provisions particular to the 1998 Act are being removed. 
 There was then a rule that fees controlled by the basic and higher limits—of course we did not have variable fees then—included admission, registration, tuition and graduation fees, but excluded those for board and lodging, field trips, the graduation ceremony itself and a number of other items that might be prescribed. It would genuinely be a service to the Committee if the Minister could say a little about how that has worked since 1998 and how it will work under the new regime. These additional fees should either be included in the list—which, if there is a principle, is academically related—or separated from the main academic processes.

Phil Willis: The Liberal Democrats will support the hon. Gentleman if he wishes to press this to a vote, but I hope it is by way of a probing amendment rather than anything else.
 In his research for this amendment, has the hon. Gentleman addressed the issue of information and communications technology within our university sector? A significant element of course materials is now being delivered through ICT, yet charges for ICT facilities on campus, and particularly for those 
 students who are studying part-time and are therefore doing a lot of work off campus, are not in fact regulated through the 1998 Act. Is that something that he would like to see included through the amendment?

Tim Boswell: I am grateful for the intervention and for the offer of support. Even for a probing amendment, we should bank the assistance we have. I will be absolutely honest: I have not considered that point specifically. The hon. Gentleman is right that there is growing dematerialisation of university courses—where they come from, how they are charged, what the interface is—which is an inevitable consequence of an electronic world. We need not upset the Minister by going into the relative failure of the e-university in uptake yet, but a reality is that people have interface. Another reality—and I think that my hon. Friend the Member for Hertsmere (Mr. Clappison) is on to this point as well—is that institutions under pressure and anxious to raise funds will raise them from wherever they can. As long as they can get it past the regulations, they will tend to charge. Indeed, there may well be cases where it is necessary to limit traffic and it is proper for them to charge.
 Can the Minister first say a little bit about how that part of the Act has worked since 1998? Why was there a recent updating and how much does that reflect either problems or the electronic developments to which the hon. Member for Harrogate and Knaresborough (Mr. Willis) referred? How much are the doctrines and experience of that period since 1998, in relation to basic fees, being translated into the new legislation to apply to both basic and variable fees? That is a straightforward discussion. I think it is one that Universities UK would appreciate, and I certainly would like some kind of answer and assurance on it. 
 The second layer of the problem relates to board and lodging fees, which, as the Minister will know, are excluded from control and will continue to be excluded under the legislation. I fully understand why Ministers do not want to start trying to tie down board and lodging fees or to regulate them through HEFCE, the access regulator or anyone else. This is a very invidious area. The hon. Member for Cambridge (Mrs. Campbell) will remember the campaign that ran about 18 months ago against colleges in her university city allegedly seeking to recover costs by bumping up the board and lodging fees charged to students. 
 As the hon. Member for Newbury (Mr. Rendel) said the other day, £3,000 is about one fifth—20 per cent. or so—of £15,000, which, allegedly, is what Oxford university would like to charge. Oxford university is our former alma mater and is almost equidistant between us. It is possible that a residential university that believed itself to be blocked at £3,000 and was bent on recovering money from students would find it very attractive to say, ''All right. The Minister has capped us at £3,000. We believe we need a larger sum. We'll get it back in board and lodging fees, or through another charge.''

Anne Campbell: I am sorry to interrupt the hon. Gentleman in mid-flow, but certain aspects of this case should be pointed out, in fairness to Cambridge university. This will not make me very popular with students in my constituency, but very few students at Cambridge university pay a full market rent for their accommodation. Their accommodation has been absurdly cheap, and subsidised, I suspect, by college fees that the Government are in the process of reducing. The hon. Gentleman should be aware that the rent paid by Cambridge university students is still well below that paid by Anglia polytechnic university students in the same city, often by about £30 a week.

Tim Boswell: I am genuinely grateful to the hon. Lady, because her remarks enable me to deal with any misconception. I was not trying to say whether those students were right or wrong; I was simply aware of the campaign. As she rightly says, it was tied in with the issue of college fees. I corresponded with the vice-chancellor of the day on behalf of one of my constituents, and had a perfectly satisfactory response from him. I am simply saying that it is possible that an institution might seek to supercharge its fees to recover a higher proportion of total income from its students, particularly if that institution were to make residence a condition of running the course. That is the nub of the issue. A collegiate or other institution would have a captive customer if it told a student that he or she must live in its hall of residence or college for a fixed period. It could charge the student whatever it liked, as long as the charge was defensible in some way. That is possible, although I hasten to say to the Minister and others listening that this has not been an actual problem.
 That brings me to the third layer of the amendment, and to the words ''irregular or eccentric'' fees, which attracted the attention of Universities UK. Members on both sides of the Committee who have ever been in the Whips Office will readily understand irregularity, and we would not want it to be adopted as a practice. I did, of course, mean fees that might be intermittent or set at different levels. Again, that was echoed in the Minister's remarks today about the coincidence of term dates and so on. This is the fantasising part of my amendment, but it needs to be said anyway. The word ''eccentric'' is important. I like it. An interesting dilemma of middle age is deciding whether the people who taught us were eccentrics, and there are no more eccentrics are left, or whether we have joined them without realising. Leaving that speculation aside, I should explain that when I used the word ''eccentric'', which I used in a reasonably precise way, I was thinking of one celestial body orbiting another eccentrically, so that it is near at one point, but then loops off and comes back 76 years later, like Halley's comet. 
 If the Minister is to have this legislation, we want him to it get right. That is why I seek his assurance on the following point, which is what I am really driving at. Suppose that a higher education institution, like my 
 fantastical William of Wykeham, were to say, ''Well, we don't like the Minister, we don't like his rules; we're going to do our best to do them down.'' Such an establishment might say, ''We're going to charge £3,000 a year, because that's what he tells us we can charge, but somehow we're going to have a provision—I don't know how we're going to do it, it may be tied to the graduation ceremony, or the issue of a degree certificate, or a subsequent academic reference or otherwise—to surcharge another £3,000 a year. Maybe we'll dress it up so it isn't on an annual basis; maybe we'll charge it after graduation.'' Hence the reference to former students in the amendment. In such circumstances, the whole intention of the legislation would be subverted by some artificial structure, although I accept the Minister's good faith on that. I have no idea whether that would stand up in court, although I do not think that it would stand up morally, or that higher education institutions wish to do it. He has excellent lawyers, so he may be able to tell us.

Jonathan R Shaw: May I contrast the hon. Gentleman's remarks with those that he and his colleagues made earlier? On the one hand they say that there is no need to introduce OFFA because universities agree with widening access and will continue to do that, but on the other he tells us, ''Well, there's a plot here. There's some dodgy dealing that might go on.'' Is not that a contrast? Surely this discussion is unnecessary.

Tim Boswell: With respect to the hon. Gentleman, whom I do respect, I think that it is right to probe such issues. He is right to say that there has been good conduct: universities have genuine good will toward the legislation, but if they are over-regulated—for example, if they have a run-in with the director of fair access—that may become an irritant and turn them toward the kind of approach that I have described. I hope that that will not happen—indeed, it probably will not—but it would be quite wrong if the Minister could not assure us that the cap that the Government wish to impose will be effective and cannot be subverted. I am at one with the hon. Gentleman on this matter: clearly, it is offensive to institutions that do their best and play by the rules if other institutions, which are particularly well advised by lawyers, and want to chance their luck or pursue a political agenda, find a way to break the rules and do something else. Labour Members would be just as angry as me—even a touch more so—if that were to happen.
 With the amendment, I seek formally to strengthen the Minister's powers and to probe their use. It would help the Committee if he answered the following questions. First, how does the system work, and how has it worked in practice? Secondly, to what extent will it be transposed into the new legislation? Will there be differences, and if so, why? Thirdly, would it be possible for someone to take a fee that is effectively obligatory on the student and use it as a vehicle for busting the system? Finally, when we pass into the world of eccentric orbits and loops around the solar system, would there be any way of devising a pattern 
 of charging that would make a monkey of the whole thing? I doubt whether that will happen in practice, but with respect, it is the Minister's job to tell us that it will not.

Chris Grayling: Welcome back to the Chair this afternoon, Mr. Hood.
 My hon. Friend the Member for Daventry (Mr. Boswell) presented the amendment in his customary authoritative and character-filled way. He has picked up on an important issue. In his defence, let me tell the hon. Member for Chatham and Aylesford (Jonathan Shaw) that the selection of the issue for debate this afternoon through the tabling of the amendment has been endorsed by Universities UK. In the notes that Universities UK sent to all members of the Committee, it highlighted that it regards the matter as an important subject for debate and as one where clarification from the Minister would be of benefit to the universities. This should not be regarded as a mischievous debate: it is a legitimate concern and one that should be discussed. 
 It is a difficult balance. I listened carefully to my hon. Friend's comments, and I am not entirely sure that I would be comfortable with providing yet more powers to intervene on universities. However, he has raised a legitimate concern that could equally—perhaps more probably—be applied to a situation where agreement over a plan had not been reached or where an institution was challenged over the effectiveness of its plan and was threatened with the loss of grant income as a result. The amendment might offer a way for the institution to put back in place the income taken away from it through the processes that the Government are enacting through the Bill. 
 My hon. Friend is quite right about the whole concept of alternative charges and fees. He described them as irregular and eccentric. I suspect that some of them could be extremely irregular, extremely clever and used by the kind of bright spark that he described to try to get around the system. Others are mainstream parts of university life. It is quite interesting that if one reads clause 38, the sister clause to the amendment, one sees that a relatively limited list of fees are covered by the legislation. It leaves open a whole variety of different areas where universities could provide alternative charges and levy alternative funding streams from their students. 
 When the Minister concludes his remarks on the debate, and when we reach clause 38, it would be interesting to hear his explanation of which part of the Bill allows him to extend the regulations to cover additional forms of charging under different forms of legislation, and the different ways in which a Minister might or might not choose to intervene and dictate to universities what they can or cannot charge. 
 From the point of view of the universities, it is extremely important to have Ministers clarify the outstanding issues. That would allow them to understand what the Government view as acceptable when it comes to the charging and levying of fees. Ideally and ultimately, it is not the role of Government to dictate what fees are levied. However, clause 38 
 suggests that they intend to prescribe what can or cannot happen. We need to understand fully the limitations. 
 My hon. Friend mentioned residential charges—board and lodging. He referred to the situation in Cambridge, which was also referred to by the hon. Member for Cambridge. Of course, the issue does not apply purely to Cambridge. Hon. Members will have seen coverage in the national press over the past few days about students in different parts of the country who face substantial increases in their accommodation charges. There is a widespread trend to recover more money from those who use services on campuses and in properties owned by universities. Clause 38 and the amendment, which addresses such residential charges, deal with those charges in an interesting manner. Those are and will continue to be excluded from the measure. 
 A striking area of uncertainty on which I would welcome clarification is that of charges levied by bodies that accredit courses run by third-party institutions. The Minister will be aware that in some parts of the country universities badge further education courses or courses in specialist colleges and provide funding entirely or partially through their own channels to those institutions. Another question arises if charging arrangements are established to underpin those accredited courses. If someone is studying at a further education college and is asked to pay a contribution towards the provision of resources or facilities for that course, on what basis, under the Bill, are those charges permissible or not? When a university accredits a course in a third-party institution and charges are levied on the students there, will charges be prescribed or not? 
 My conversations with universities have made me aware of several other things, some of which were also raised by Universities UK, that are not mentioned in the Bill, but certainly fall under the umbrella of irregular or eccentric fees. The Universities UK document refers to a number of occasional charges, such as library charges or charges for materials such as art materials or for field trips, the last of which is included in the Bill. Those are no doubt dealt with in the 1998 Act. However, the Minister could usefully explain whether he intends to prescribe in further regulations limits to what universities can charge on other things, or whether he means to leave a completely open market. 
 I visited Exeter university recently, where there is an extremely good sports facility which is an integral part of its sports degree courses. However, it is also a substantial resource for students on campus. The university does not levy more than a nominal charge to students for the use of the facilities. It is conceivable that, in future, a university that wanted to increase its revenue flows might think about increasing the charges for the use of such a facility in order to strengthen its finances. That would have a knock-on effect on the students on those courses.

Tim Boswell: Does my hon. Friend agree that there are analogies with the statutory-age school sector, in that schools that find that their public funding is under pressure now work extremely hard to expand their potential income generation?

Chris Grayling: Absolutely. That is what underpins my hon. Friend's amendment—the thought that universities might seek to raise funds through alternative channels, as he describes schools doing, using facilities that they have on site, which have until now been provided to students free perhaps as part of, or related to, a course such as sport. What will be prescribed in regulations with respect to those irregular charges? Will there be a completely free and open market for universities?
 The hon. Member for Harrogate and Knaresborough made an important point: ICT is a major cost for universities and, as far as I can see, neither clause 38 nor the 1998 Act contain anything to stop universities levying substantial charges for the use of computers on site.

Graham Allen: The hon. Gentleman mentioned Exeter. Will he concede, and congratulate Exeter on, the fact that there is another side to the equation? There are more than 1,400 bursaries of up to £4,000 for students of very small means. It seems that the university will use 30 per cent. of the income to be generated from fees to assist those individuals. I hope he welcomes that.

Chris Grayling: I suspect, Mr. Hood, that if I were to congratulate Exeter university I would be out of order. However, any initiative taken by the university sector to fulfil the goal of widening participation would be a good thing, and we would support and encourage any institution that independently and autonomously sought to pursue such a route.
 The point of the debate is to clarify what else universities can or cannot do. For the first time, the Government will be allowed to impose their own admission strategies on universities, which will have an impact on university finances. My hon. Friend the Member for Daventry sensibly says that universities may seek alternative funding if their strategies do not meet the aspirations and gain the approval of the Government and regulator. He rightly wants to find out how much flexibility the Minister will allow universities, given that the 1998 Act and later provisions of the Bill specifically curtail the right of universities to levy fees and, in some circumstances, to levy irregular fees. 
 What is the Government's intention? Will they allow universities total flexibility to charge for services provided, except in a limited number of cases, or, given that they can pass further regulations to extend the powers in this part of the Bill, do they intend to be stringent in what universities can and cannot charge for, with a pretty clear dividing line between the two? 
 I congratulate my hon. Friend on highlighting the issue. It must be addressed. The Minister's answer should be on the record. We need to understand what the Government's intentions are, and I look forward to hearing his comments. 
 The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson): I welcome you to the Chair, Mr. Hood.
 I thank the hon. Member for Daventry. He said that he had a number of confessions to make. I thought that one of them might be that he was trying to help the Government, because that was his very next comment, but his confessions were more about being a nerd or an anorak, and having an oblique mind. 
 I am genuinely grateful to the hon. Gentleman for probing. I hope that it is a probing amendment. Although it is in tune with an early debate about possible loopholes, it is unnecessary. It has a serious technical flaw and could lead to confusion. It mentions ''after consultation'' but does not say who is to be consulted. It also states ''impose such requirements'' but does not say who is to impose them. The spirit of the debate is about whether clause 38, the sister clause to clause 23, is sufficient. We believe that it is. 
 The hon. Gentleman asked what has happened since 1998 and whether we have had any problems. We have had no problems, which is why we want to repeat the wording. He was right to ask why the wording was different in the Learning and Skills Act 2000, in which we changed the word ''attending'' a course to ''undertaking'' a course in higher education. That was important because it covered a broader range of courses. However, clause 38 sets out what fees are, and what they are not, for the purposes of the Bill. That provision has stood the test of time and worked well. I counsel the Committee against changing it, although I realise that he thought his amendment would be helpful. 
 The hon. Gentleman asked about board and lodging. That is not regulated and we have no wish to regulate it. It is the same for sports facilities, which the hon. Member for Epsom and Ewell (Chris Grayling) mentioned, and ICT facilities, which should properly be part of the fee if they are part of the course, as clause 38 makes clear. The hon. Member for Harrogate and Knaresborough also raised that. If such facilities are an optional add-on, students have the choice of paying that. I appreciate that in some cases an undergraduate in their first year might be told that the board and lodgings were part of the offer, but the provisions are about enabling students to pick and choose where they study. It is not in the interests of higher education institutions to pull such strokes and ramp up the board and lodging so much that students are deterred either from going to that university if the board and lodging is compulsory or from using it if there is a choice of student accommodation. 
 I was puzzled by the reference to former students. I thought that it might be a provision to help graduates with their CVs, or something of that nature, but the hon. Member for Daventry linked it to a graduation ceremony.

Tim Boswell: That indeed would be one option if there were a surcharge or if the matter in question were outside the regulated sector and too expensive. The provisions could also be used down the track, by issuing a graduation certificate. If the Minister has to release information under the Freedom of
 Information Act 2000, he may make a reasonable charge for doing so, but he may not profit from the exercise by charging whatever figure comes into his head.

Alan Johnson: I take the point. Graduation fees can be included in the fee, but graduation ceremonies must be excluded, under clause 38. Once again, however, we must ask whether it is in the universities' best interests to pursue former students in that way. That is particularly so, given that we all agree that one element of extra funding for universities will come from bursaries and contributions from alumni, as Dearing recommended, although that is in the long term. Former students might be charged for a graduation ceremony and, in the next post, receive a letter asking them to make a contribution to the university. There must be a sense of balance. The proposals are not in the universities' best interest.
 There have been no incidents whatever that have persuaded us to change the clause. However, as I think the hon. Member for Epsom and Ewell pointed out, clause 38 allows the Secretary of State to prescribe other fees. We shall debate that later. If something of a scam emerged, it could be addressed, which is a better route. Incidentally, the technical flaw with the amendment is that it relates to fees, which are defined in clause 38. We would have to return to the original definition, which means the amendment would have no effect. The hon. Member for Daventry has probed the issue, so I hope that he will withdraw the amendment. If not, I hope that the Committee will defeat it.

Tim Boswell: The Minister is characteristically open and generous. The amendment probes a subject that I felt was worth probing. However, if I read every word of the Minister's remarks, I suspect that I would feel a little less sanguine that he does. The context to the debate is, first, that we are developing a regulated sector. A priori, anything outside the regulated sector becomes more attractive to an institution, just as, for example, charging outwith the regulations becomes more attractive to water authorities, whether they are within the regulated sector or outside in their general business. Secondly, Committee members know that there is pressure on the finances of universities and that they are seeking to generate income whenever they can.
 However, the Minister is a reasonable man. He explained that there are reserve powers in clause 38 under which he could intervene if necessary. I do not want him to have to intervene, and I do not anticipate that he should. The powers are imperfectly drafted, but if he is content to let them lie, we can move on, although it was useful to make the point. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

David Rendel: I beg to move amendment No. 106, in
clause 23, page 9, line 46, at end insert—
 '(3A) No condition may be imposed under this section unless the funding body is satisfied that the total amount of the qualifying fees in respect of any eligible student will be met from grants payable in accordance with regulations under section 22 of the 1998 Act (new arrangements for giving financial support to students).'.

Jimmy Hood: With this it will be convenient to discuss the following amendments: No. 107, in
clause 23, page 10, line 25, at end insert— 
 '''eligible student'' means a student eligible for a grant under regulations made under section 22(2)(a) of the 1998 Act;'. 
No. 108, in 
clause 26, page 12, line 2, at end insert— 
 '(3A) No condition may be imposed under this section unless the Higher Education Funding Council for Wales is satisfied that the total amount of the qualifying fees in respect of any eligible student will be met from grants payable in accordance with regulations under section 22 of the 1998 Act (new arrangements for giving financial support to students).'. 
No. 109, in 
clause 26, page 12, line 29, at end insert— 
 '''eligible student'' means a student eligible for a grant under regulations made under section 22(2)(a) of the 1998 Act;'.

David Rendel: The Liberal Democrats also welcome you back to the Chair, Mr. Hood.
 At the beginning of our debate, it was said that the first string of amendments was the critical group that would decide the whole future of the Bill. I have always believed that the second string of amendments is equally important for the following reason. The first string was all about variability, which, as we all know, is a critical issue, and we all accept that the whole Bill might fall because of it. The amendments attract a lot of support from Government Members as well as from the Liberal Democrats. I was, however, grateful to the hon. Member for Westmorland and Lonsdale (Mr. Collins) for clarifying the Conservatives' position. The Liberal Democrats were surprised and disappointed that the Conservatives could not support them on variability, since the Government might lose the Bill because of it. I am, however, grateful to him for clarifying the fact that he and his party still object to fees and top-up fees, because that is what this group of amendments is all about. Will we ask each student or graduate, under the current scheme or the new one, to pay for at least a significant part of the costs of their higher education, or will we say that the costs of higher education tuition are to be borne by the taxpayer, which the Liberal Democrats have always made it clear they would prefer? 
 We have returned to the critical division on the issue between the Liberal Democrats and the Government—the two parties that currently have a policy on higher education. The two policies are quite clear. The issue was discussed at length during the debate on the first string of amendments, and I do not intend to repeat all those arguments as I hope that, by now, the other members of the Committee have understood my ideas and those of my hon. Friend the Member for Harrogate and Knaresborough. I will, however, discuss some of the important points—the highlights—of that debate, as they are the issues on 
 which this string of amendments will have to be decided. I will not, however, go into them in such great detail. 
 The amendments are critical to the question of whether students or the taxpayer will pay the fees, so I very much hope that the Conservatives will vote for them. I hope that those Members from the Welsh side of the border will also support them because, unfortunately, Labour Members may not. I hope that one or two Labour Members will be able to support our amendments. We will probably receive as much support for them as we received over variability. I briefly remind the Committee of the way in which we differ from the Government on the issue of who should pay the tuition fees. The first of the Government's objectives was that more money should go to universities. We agreed. The other day, I made the point that paying tuition fees through the taxpayer—a method that we support—will get the money to the universities more quickly, which is important. Universities UK is crying out for the money, which is needed straight away. The universities will get the money much more quickly if the taxpayer pays the higher education tuition fees. 
 Secondly, the Government and the Liberal Democrats would like more students to go to university. If we get the taxpayer to pay the tuition fees, fear of debt will be reduced, which in turn will encourage more people to go to university. 
 Thirdly, the Government wished to ensure wider participation. This group of amendments will help to encourage those from less traditional backgrounds to consider taking up a university place. They will no longer have to fear that, at relatively low levels of income—perhaps around the £20,000 mark—they would in effect be paying a marginal rate of income tax of 42 per cent. Critically, if they are one of those graduates who get the kind of degree considered by the Government to be valuable and likely to lead to a higher earning job, but then go on to earn a comparatively low salary, perhaps in the public services, they will not have to fear the consequences. That is the important difference between payment by the taxpayer and payment by the graduate themselves. 
 That issue particularly effects women. I see two women on the Government Benches today, so perhaps this point has particular relevance to them. It has to be said that nowadays, and I quote a Government Whip, the Government have made much greater moves than ever before towards granting paternity leave as well as maternity leave, and now men are just as likely to stay at home as women. 
 Those who choose to stay at home for a period of their working lives for whatever reason, very often to look after family, will undoubtedly be worried about getting into debt. The cut-off point for debt repayment is 25 years, and while someone who took three or four years off may manage to pay off the whole amount, they will of course do so over a longer period than if they had worked the whole way through. They will 
 therefore have greater fears over matters such as the possibility of raising money for a mortgage to buy their own home.

Graham Allen: One of the great advantages of the Government's proposal is that if a woman wishes to have a child, or to take a lower-paid job in the voluntary sector, her repayments will stop the moment she drops below the repayment threshold. Unlike many other societies that have a repayment scheme—on most American student loans, for example, one has to repay a given amount per month regardless of one's circumstances—the Government's progressive proposal will encourage those who wish to take up careers or start families to drop out of the job market, without penalty.

David Rendel: The hon. Gentleman is slightly missing the point. He is comparing the system that the Government are trying to introduce with the American system. The Government's proposals may be more progressive, but in this set of amendments we are comparing them with funding higher education tuition fees out of an extra income tax on those earning more than £100,000 a year, which, I would suggest to the hon. Gentleman, is more progressive than the Government's system.
 Finally, I move on to the last of the Government's supposed aims in this matter, which is to ensure that those who benefit financially are those who pay more. Graduates earning more than £100,000 a year would be likely to pay off their graduate debt within, at the very worst, two or three years under the Government's system. At 9 per cent. of £100,000 less the threshold, the debt will be paid off pretty quickly. Those who are very rich will not have much difficulty in repaying any graduate loan within a year or two. The rest of us, of course, may have to pay for anything up to 25 years before we reach the cut-off point. By asking those who benefit from higher education by earning huge salaries to pay more for it, our Liberal Democrat system is clearly a great deal more progressive than the Government's. 
 I made those points at greater length the other day, and was able to elaborate on them more. I hope that the Committee can remember some of the detail of my argument, which I do not intend to go over again today. I hope that the Government will conclude that the Liberal Democrat system is indeed more progressive, and that it would achieve all the Government's aims without the disadvantages of their scheme.

Jimmy Hood: Before I call the hon. Member for Westmorland and Lonsdale I want to echo the remarks of the hon. Member for Newbury and say that I hope hon. Members will recall what has already been said, avoid the temptation to repeat earlier debates, and stick strictly to the amendment paper.

Tim Collins: I am happy to confirm to the hon. Member for Newbury that, should he choose to press the amendments in this group to a vote, he will have the support of the official Opposition. There are two reasons for that. First, although the hon. Gentleman
 was perfectly understandably at pains to explain that the thinking behind the amendments lay with his party's policy on higher income tax for people at a certain level, and so forth, none of that is set out in the amendment, which simply provides another mechanism for getting rid of top-up fees.
 The clear Conservative view is that there should not be top-up fees. We are committed to opposing them and reversing their imposition. We shall in due course set out an alternative mechanism to the one advocated by the hon. Gentleman for providing the additional funding for higher education that I think is accepted as necessary on a cross-party basis. However, we are certainly happy to support the principle of any amendments that would strike out top-up fees. Of course, it is very much our view that the best way to defeat them would be to defeat the Bill. That continues to be our objective.

Simon Thomas: The hon. Gentleman said that he would seek alternatives. We have heard the Liberal Democrat alternative, but perhaps I can tempt him down the Plaid Cymru line of an extra income tax at the £50,000 mark, rather than the £100,000 mark.

Tim Collins: I must stay closely within your edict, Mr. Hood, but I think that I am correct in quoting the hon. Gentleman as saying, in our earlier deliberations, something like, ''All of us, as socialists, should think this or that.'' I have to break the hard news to him that my hon. Friends and I are not socialists. At the moment I am never quite sure how many members of the Committee, in at least two of the other parties represented here, would be regarded as socialists. Certainly, the Conservatives are not.

Patrick Hall: Does not the hon. Gentleman think that it is incumbent on him, since he and his hon. Friends will support the amendments, to do what the Liberal Democrats have at least had the courage to do and put forward a way of funding them? He has said that that will be done in due course, but will due course be this afternoon?

Tim Collins: I am sorry to disappoint the hon. Gentleman if he was waiting with bated breath to rush out a press release to his constituents to welcome the Conservative policy. I give him notice that he may well want to prepare such a press release for the moment when we do announce it, but this afternoon will not be the moment for him to notify his local media of those sentiments. As I have said, we shall bring forward proposals. I confirm that we shall produce our proposals earlier in this Parliament than the Government produced theirs in the previous one—and we shall keep to them, rather than doing the opposite, which is the Government's track record.
 I want to stick quite closely to the amendments. I said that there were two reasons for our being able to offer the Liberal Democrats our support should they press the amendment to a vote. First, it would strike out top-up fees. Like all the relevant amendments that have been tabled, it is a slightly convoluted way of doing it. The better way would be to kill the Bill on 
 Third Reading. That will very much be our intention, if we can secure that objective, but this amendment would go part of the way towards doing that and would ameliorate some of the impact. 
 There is a second point underlying the reason we are able to support these amendments, whatever technical deficiencies the Minister with the quality of the advice available to him may in due course tell us he has been able to discover. The second reason we believe these amendments are worthy of support is that, as the hon. Member for Newbury set out, there are real concerns and fears about the financial impact on aspirant students of the introduction of these fees. The hon. Gentleman set out a number of examples as to why those are real and realistic fears. I will add a couple of others. 
 In common with Members on both sides of the Committee, and indeed of the House, I have received considerable correspondence from constituents and others. A couple of points, which have not been widely aired in our deliberations, have been made by some of those who wrote to me. We have necessarily deliberated on the cost to students arising from the imposition of fees, and the balance advanced by the Government of the potential or actual financial advantages following from being a graduate, as opposed to not being a graduate. Many of those deliberations did not take into account two significant factors. The first is that one is looking at three to four years, perhaps longer, of deferred earnings. That is a very significant factor indeed, if one is going to be making calculations about the comparison between the lifetime earnings of those who choose to go into higher education and those who do not.

Tim Boswell: As my hon. Friend knows, I have taken a certain interest in this matter. When he says that it is a consideration of deferred earnings, in fact the opportunity cost is to have lost the earnings altogether. They may come back later, but they are three years down the Swanee anyway.

Tim Collins: My hon. Friend is entirely right. He picked me up; I indulged in loose and inaccurate language and am grateful for his correction. He is right. The earnings concerned are not deferred, they are cancelled, they are lost, they are gone—one does not wish to start repeating a Monty Python sketch at this point, but that is the general drift.
 There is a second point. One particular correspondent, who has gone into the teaching profession, wrote to point this out. In addition to losing three to four years of earnings, perhaps more significantly to many people who are now coming towards the end of their working careers and are starting to think about these matters very seriously, one is missing three to four years of pension contributions. As we well know, outside this House today, and elsewhere, there have been many representations about the difficulties that people face from the lack of adequate pension provision. Again, the reason that we think it is sensible to support the group of amendments of which No. 106 is the lead 
 amendment, is that by removing the fear of top-up fees, of tuition fees, one enables a rebalance—[Interruption.]

Jimmy Hood: Order. The hon. Member for Worcester (Mr. Foster) should keep in order.

Tim Collins: The calculation that many people at the age of 18 will have to make about the financial advantages or disadvantages of going into higher education is not simply about whether they will be likely to earn more money at the end of the day. It is not simply about whether the extra earnings they will get through a higher salary—if that is the likelihood—will counterbalance the extra debt incurred as a result of the fees. It is also about whether those extra costs properly compensate them for the loss of earnings and the loss of pension contributions.

Graham Allen: Would the hon. Gentleman accept then that the burden is more onerous and the decision even more difficult for those who not only face deferred or lost earnings but also look at going to university without a grant, when they do not have the means to support themselves. That decision is even more difficult. In that context, would the hon. Gentleman tell us what his policy is on retaining the £3,000 grant?

Tim Collins: I am grateful to the hon. Gentleman for a rather more gracious intervention than some of his comments earlier today. The point that he makes is important. It is true that the Government will seek to explain that, from their point of view, the financial impact of top-up fees will be ameliorated at least for some categories of our fellow citizens—and, I suspect, for a large proportion of those who live in the hon. Gentleman's constituency—by the attractiveness of the grant arrangements, to the extent that young people are fully familiar with the implications of the grant system, and to the extent also that they believe those grant arrangements will be in place and will be of benefit to them. However, the hon. Gentleman will acknowledge on reflection that there are a number of problems.
 First, many people who are by no means wealthy will not be able to gain the support of a grant, and that is likely to be a negative effect. Secondly, although the Government are being more generous than we have seen for a number of years—I do not criticise them for it, because it would be difficult to justify such a use of public resources—they are not being so generous that it will be an open-and-shut, easy-peasy decision; people will obviously not be enormously better off going to university than otherwise, and not all the problems will have been solved. If the hon. Member for Cambridge were here, she would say that the sum total of bursaries and grants at Cambridge and one or two other universities is significant; indeed, in one or two cases it may be as high as £10,000 a year. However, the hon. Gentleman must admit that that is not exactly typical. That is not likely to apply to the majority of students.

Graham Allen: The hon. Gentleman talks as if grants will affect only a small number of people. Even in his area, 42 per cent. of his constituents will come from families who could benefit from a full grant; and 82 per cent. will come from families who could benefit from a partial grant. Perhaps the hon. Gentleman misunderstood me, so I repeat my question. Will the hon. Gentleman and his party continue their policy—

Jimmy Hood: Order. I suspect that the hon. Member is referring to a previous group of amendments. We are talking about tuition fees.

Tim Collins: I am grateful, Mr. Hood.
 First, the hon. Gentleman confirms something that may be more of a surprise to his hon. Friends than it is to mine, which is that plenty of people in Conservative-held constituencies are by no means well off. However, that strengthens our argument rather than the hon. Gentleman's. Secondly, he quite properly asks another variation of a question put to me several times this afternoon, which is what is the Conservative alternative. I can say only that he will have to be patient. It will be set out with great clarity, and in a way that will enable him, if he is in a Christian charitable mood, to welcome it, but it will not be set out this afternoon. He is right to say that we will need to address the question of grants, and we will do so, but beyond that I cannot go.

James Plaskitt: When the alternative is announced, will it replace in full the funding stream lost through the abolition of tuition fees?

Tim Collins: Although the final details of our proposals have not yet been agreed, I think that I am likely to be in a position to say not only that it will fully replace the flow of funding that comes from top-up fees but that we will be offering a deal that is better for universities and the taxpayer than the deal on offer from the Government. After all, at a cost to the taxpayer of £1.2 billion, the Government propose giving £900 million a year extra to the universities. It does not require a mathematician of genius, although we have talented mathematicians working on our proposals, to come up with something better than that for taxpayers and universities alike.
 I am anxious to continue. I have taken interventions from some hon. Members who earlier in our proceedings, but not under your excellent chairmanship, Mr. Hood, complained that we were taking too long in discussing important various aspects of the Bill. I am therefore keen to bring my remarks swiftly to a close. 
 I am sure that the amendments are not perfect, but they none the less give us a further opportunity to register the cross-party reflection—I hope that it is shared by some Labour Members—that neither in the country nor in the House is there a strong majority in favour of top-up fees; some might argue that there is no majority at all. Although the Government are constantly at pains to try to explain the merits of the 
 sugar with which they intend to coax the medicine down the nation's throat, it is the medicine we are really debating.

Phil Willis: Perhaps it is just terminology, but throughout his contribution, the hon. Gentleman has talked only about top-up fees. The amendment would get rid of all fees, including the basic fee. Is that the hon. Gentleman's understanding of the amendments? Does he support getting rid of the top-up fee and the basic fee?

Tim Collins: I am happy to confirm that. I was asked earlier by the hon. Gentleman and the hon. Member for Newbury and others to confirm that the Conservative party remains committed to getting rid of top-up fees and tuition fees. I am happy to place on record, once again, that it is indeed the position and that we are committed to getting rid of both. Neither were in place when my party was in office or when my hon. Friend the Member for Daventry was the Minister with responsibility for higher education. We would indeed seek to get rid of both. We are focusing on the medicine rather than the sugar because I do not think the foul-tasting mixture will do anyone any good. We will support the amendments and hope that they will be accepted.

Alan Johnson: That was an astounding contribution from the hon. Member for Harrogate and Knaresborough, who has an intellectual grasp of the problems in higher education, and whom I very much respect.
 The amendments are technically flawed and at the end of our debate I shall tell the Committee why they should reject them. Although it is my duty to point out the technical flaw, I invite the Committee to reject the proposals on the basis that they would take £800 million out of the higher education sector. The hon. Member for Newbury made it clear how the Liberal Democrats would replace it and put in more taxpayers' money. It is fair to point that out, but it is not part of the amendment, although it relates to our debate. 
 The hon. Member for Westmorland and Lonsdale gave us no idea how the Committee, which is considering the future of higher education, should take the leap in the dark. We have had the Dearing report, the Cubie report, the Rees commission and an interesting book by Robert Stevens, published about four weeks ago, called ''From University to Uni'', which the hon. Member for Daventry may have read. It is a very interesting exposition of the history of university funding and it points out the compelling nature of the argument for additional funding in higher education. In spite of all that, the Committee is being asked to accept an amendment that would take £800 million out of higher education. That is the equivalent of about 100,000 jobs in higher education, which, as the Higher Education Policy Institute pointed out, year on year by 2010 would lead to about 200,000 fewer university places than there are at present.

Phil Willis: The Minister is either deliberately misrepresenting my position and that of my hon. Friend—I do not speak for the Conservative Front Bench—

Jimmy Hood: Order. I am sure the hon. Gentleman is not even trying to suggest that the Minister is misrepresenting anything.

Phil Willis: You are right, Mr. Hood, I am not suggesting that. I am, however, suggesting that the Minister inadvertently misunderstood our position. Let me clarify two things. The first is that the amendment would remove the element of fees that would be paid by the student—it is not £800 million; it is roughly £450 million at present—but it would not remove the Government subsidy that goes towards the basic fee. Secondly, the Minister mentioned £800 million. Does he accept that we would replace that funding pound for pound from the higher tax rate contribution by allocating £2 billion, which would include the £450 million and the £150 million for the extra grant, bringing the amount up to £2,000, with the remainder to match what the Government are putting in through top-up fees of £1.2 billion?

Alan Johnson: To be fair, I explained that although it is clear that the Liberal Democrats would replace the money through the taxpayer, that is not part of the amendment. That is all I was saying. The amendment simply removes the money. The hon. Gentleman was not present on Thursday, but he is right that £800 million goes into universities from fees, a large chunk of which is paid by the Government as a result of fee remission. The amendment would do away with fees, which produce £800 million for universities, and it is perfectly fair for us to explain that. Even if the total was the lower figure that he suggested—£500 million—it would definitely not solve all the university sector's problems.
 Circulars from Universities UK and the Association of Colleges were mentioned. Which part of the higher education sector would support the proposal in the amendment? Many people in the higher education sector would be almost suicidal if we took the step it outlines while debating the future of higher education.

Phil Willis: First, as the Minister knows, we are not attempting to remove £800 million, but to replace the student element of that funding through taxation. Secondly, he is right to say that Universities UK and the Association of Colleges do not support our proposals. However, he does not say that all the lecturers' associations, 64 per cent. of Labour party members and 82 per cent. of the general public do support them. Let us have a balanced argument.

Alan Johnson: I wish that the hon. Gentleman would not keep intervening to make me repeat what I have said. The amendment would not put any money back into higher education; it would just remove it. If it removes only £500 million—taking his figure—that would still be a disaster for higher education. While the National Union of Students and the Association of
 University Teachers have always held the same view as the Liberal Democrats—that it should be funded through the taxpayer—they support, as do the Liberal Democrats, the expansion of higher education and the need to invest more money to provide a proper, high-quality university education in this country.
 As I mentioned on Second Reading, we have a situation in which China trebled the number of students in higher education from 5 million to 15 million in just over three years, India churns out a million graduates every year, and Canada, America and, in particular, Singapore are expanding higher education. 
 Dearing was a national committee of inquiry that took a comprehensive look at funding with a representative from the National Union of Students. They unanimously said that universities got into this situation by depending on the taxpayer. The same point is made in Robert Steven's book. The problem with the hon. Gentleman's case for the taxpayer providing funding is that it will not guarantee that the money will go to universities, while our proposals will. [Interruption.] He went to the Select Committee and rightly said that he could not guarantee hypothecation of the money because no one could. Under our system, the money goes directly to the universities. I agree that there is an argument about the part that comes from the taxpayer, but we are giving the universities the absolute guarantee that the stream of funding—a 30 per cent. increase in money for teaching, as worked out by Universities UK—is theirs and will go directly to them if and when Parliament passes the Bill.

David Rendel: Will the Minister give way on that point?

Alan Johnson: No, let me finish because I am determined to continue the argument about what is happening around the world. Let us forget Dearing for a second—although we would all be absolute fools as parliamentarians to forget the results of a national committee of inquiry that said unanimously that graduates, as well as the taxpayer and employers, should contribute to the stream of funding—and refer to the Cubie committee instead.
 I mentioned last week that the Liberal Democrats have been consistent since they last won an election in 1918, when there were 13 universities. At that time they believed in free higher education in universities. They say that it will be the same if they ever get back into government. However, they are part of a coalition Government in Scotland, where graduates make a contribution. They do that because Dearing was the national committee of inquiry pre-devolution. The Cubie committee was set up post-devolution. Its report was vehement about the need for graduates to make a contribution. At one point, it stated: 
 ''We are therefore persuaded that, after graduation and when earnings have reached an appropriate level, it is in principle acceptable for society to look to graduates with first degree level qualifications to share the costs of higher education.''
In a rather wry comment, the report also stated: 
 ''It is of some interest that those who support the concept of free education most are those who have benefited from it and those from better off backgrounds.'' 
It recommended a fee of £3,075. 
 The Scottish Parliament and the marvellous coalition Government, whom I very much support, translated that figure into a £2,000 graduate contribution. However, they took the Cubie report into account and accepted that it is not possible to rely purely on the taxpayer to get sufficient funding in higher education because that does not guarantee the stream of funding from the Chancellor of the Exchequer, of any political persuasion, to the universities. Even if that were the case, there are other priorities for higher education. 
 If we agreed to increase the tax rate in the way that the Liberal Democrats propose, let us imagine what would happen if that money—the £3 billion, £4 billion or whatever the 50 per cent. would be—came swishing down Whitehall, past the Department for Work and Pensions and the Department of Health, around Parliament square and up Victoria street, and then left towards Sanctuary buildings, to arrive at the Department for Education and Skills. Let us say, although it is not true, that I am at the top of the Department when it comes to higher education and that the money has to go through all the other sections of the Department—those that look after the under-fives, primary schools, secondary schools and further education, which affects 4 million adults. At a time when we fund university students to a far higher degree than we fund the under-fives, primary schools and even secondary schools, and when there is an alternative that has been endorsed by Dearing, Cubie, Rees and the Select Committee on Education and Skills in four separate reports, should we say, ''We are not going to put the money into the under-fives or any other area of education. To retain the principle—a piece of dogma—that higher education must never take a penny from graduates at any stage, we will put it into graduate education''? That would be wrong. 
 The Government must be brave when they argue their case. The under-fives will not be lobbying Parliament. They will not be marching on Whitehall and putting their case forward because they cannot. We have to make the case logically that it is right for graduates to contribute. That contribution should be income-contingent when they are earning, through the system of payroll deduction and all the things we have discussed in many other forms.

David Rendel: The Minister appears to be saying that if that amount of money were available from taxation, the Govt would not use it on higher education—a smaller amount would be put towards higher education and the balance would be used for some other purpose that they think is more important. We are saying that that amount will be available for higher education under his scheme—there is a bit that students pay and a bit that comes out of taxation. There will be exactly the same amount of money. If the Government's priorities are that that amount should not go towards higher education but that some of it
 should be paid to other sectors, they will simply reduce the amount taken out of taxation for higher education and use it elsewhere. So his scheme will have precisely the effect that he accuses our scheme of having.

Alan Johnson: We hear ever more ingenious ways to justify higher taxation, but that Liberal Democrat dogma does not apply in the only place in the United Kingdom where they are in government, where they accept that graduates should make a contribution. I made the point again last week. The hon. Member for Harrogate and Knaresborough was not present. I heard the speech made by the leader of the Liberal Democrats to the London School of Economics, in which he said that they would provide the money for maintenance grants. However, that money would not go towards teaching. We are going to put money into teaching and we will provide the maintenance grant fee. What is the difference? Graduates are making a contribution. We can argue about the way in which the contribution should be made, but the point is that the amendment would not require them to make any contribution.

Chris Grayling: I listened carefully to what the Minister said about where the money would end up and where it would come from. Can he explain the comments made by the Prime Minister on 25 February? He said:
 ''But we could not put all that additional money into schools and, indeed, into our universities unless we changed the system of university funding to make it fair for the student, fair for the family and fair for the taxpayer.''—[Official Report, 25 February 2004; Vol. 418, c. 275.] 
He used the phrase ''additional money into schools'' when talking about this measure. What confidence can we have that the Government are not going to claw that money back for other purposes?

Alan Johnson: If I remember rightly, that statement related to the need to look at all elements of education—because access to higher education does not start at 18 age, we have to invest in all parts of the education system. There is no point encouraging more and more youngsters to aspire to university and enabling them to obtain at least two decent A-levels or a level 3 qualification if there are no university places or the university places that are available are ''on the cheap'', so that they will not receive a quality higher education. There must be investment throughout the system.
 Can we guarantee that the money will go into higher education? We can guarantee that the element from fees—the £1.8 billion that we predict will come from current fees and variable fees—will go to universities. With regard to the rest of it, the legislation stipulates that HEFCE cannot take fees into account when deciding how much money is allocated from the public purse. There are as many safeguards as possible, but the hon. Member for Harrogate and Knaresborough is right that that cannot be guaranteed in the future. However, as Dearing said, we can make a much better attempt at doing so if there is a balance between the graduate contribution, the lion's share paid by the 
 taxpayer, and employers, about whom we have not talked very much, although doubtless we will before the end of the debate. 
 Alan Wagner of the OECD appeared before the Cubie commission, which reported his comments in the final report. He said: 
 ''My reading of the comparative experience is that even countries which have most strongly supported 'free education' are finding it necessary to narrow that commitment in the face of expanding enrolment and growing competition on the public budget.'' 
So the debate is not taking place only in the UK. In Germany and France—countries that were dead set against any interference with the principle of free higher education—people are also having to rethink. 
 I accept, however, that the Liberal Democrats have a consistent policy, but I cannot understand the Conservative party's change of position.

Tim Collins: The Minister and I have had perfectly amicable discussions on this matter on many occasions. However, I must pick him up on the phrase, ''change of position''. One issue on which the Conservative party and the Labour party fought the last election was that of top-up fees. We have not changed our position.

Alan Johnson: I will not bore the Committee with definitions of top-up fees. The point is that the Conservative party has changed its position not since the last election, but since questions to the Department for Education and Skills about two months ago. When the previous shadow Secretary of State was in post, before the reshuffle and the change of leadership, it was perfectly clear what the policy was. It was perfectly reasonable and the three alternatives were set out starkly: funding from the taxpayer, funding from the taxpayer and a graduate contribution, and contraction of higher education. Instead of increasing student numbers and not putting the extra money in, as the previous Government did for many years, the argument was that we could guarantee quality higher education by contracting the number of people who go into higher education so that there are fewer students. That was a useful argument because it focused on the three alternatives, but it is no longer made.
 I find it incredible that Her Majesty's official Opposition duck the issue so that they do not have to reply to anything. They do not have to say what they would do. What we know, however—I find this extraordinary, and if I am wrong I will take an intervention—is that their review and analysis is guided by four principles: increase university income; improve the financial position of students in respect of debt; increase universities' freedom from Government; and have no increase in taxes. There is also a fifth—no fees. That is the big Rock Candy mountain world, usually inhabited by other political parties. It is incredible stuff.

Tim Collins: Can I take it that if Her Majesty's Opposition bring forward a proposal that meets each of those five tests, the Minister will drop the Bill and adopt it instead?

Alan Johnson: I do not know whether I would drop the Bill, but I would drop to the floor. The White Paper was published a year ago last month, so why cannot we have some thinking that brings the policy forward now? Conservative Members should listen to the hon. Member for Wantage (Mr. Jackson), who remarked at Second Reading:
 ''The time will soon come when the electorate will ask whether the Conservative party is once again a serious party of Government. I must tell my right hon. and hon. Friends on the Opposition Front Bench that when that time comes, I believe that the way they have chosen to handle this issue will be remembered and will be held against them''.—[Official Report, 27 January 2004; Vol. 417, c. 231.] 
That is a fair comment from a member of Her Majesty's official Opposition and from a distinguished former Higher Education Minister to boot. 
 The technical reason why the amendments should be rejected is because the effect that amendments Nos. 106 and 107 would have in England and that amendments Nos. 108 and 109 would have in Wales. They relate to a condition of grant and they would have the power of giving the funding body grants to match fees. That is the trick; we have a fee but it is matched by grant and therefore the fee is cancelled out, but there would be no power at all to regulate when it did not match the grant. In other words, when the grant matches the fee, that is fine. However, when it does not match the fee, which is exactly the situation that members of the Committee should be trying to avoid—for example, there is a £2,000 grant and a £5,000 fee—the provision would have no effect because of the way in which it is couched. 
 The other effect is that we would set up an enormous bureaucracy so that every individual student, including those who are receiving partial grants, would have to have their fee matched against the grant. It would not be a case, as it is now, of looking at the whole institution and agreeing with the access regulator on where to go; it would mean looking at every individual deal with the student in terms of what grant they brought forward and what fee that would involve. 
 For those reasons, amendment No. 106 would be a horrendous mistake. Although it was moved on honest grounds by the hon. Member for Newbury, the Committee should reject any graduate contribution and depend on the taxpayer. I do not think that that proposal stands a moment's proper scrutiny if we are talking about the health of an important higher education sector in this country.

David Rendel: I do not intend to take long in replying to the Minister's remarks, but it is exasperating how often we explain to the Minister that his scheme has exactly the same effect as he declares that our scheme has and uses that as an argument against our scheme. He still seems incapable of grasping the point.
 Let me make one final effort to explain the position to him. If he believes that his way of funding universities is so much more secure than our method of doing it through taxation, will he explain why, when the Government first introduced fees and told universities that the money would be additional in exactly the same way that he says that top-up fees will 
 now be additional money, that did not happen in practice? All that happened is that the Government reduced the amount available to universities from taxation in line with the extra money that they were receiving from fees. 
 I am the first to admit that that situation has now begun to change. Now, some years later, the Government are genuinely beginning to increase the money available from taxation, just as a Liberal Democrat or any other Government could do some years later. However, the point is that there was no reason to suppose that that money would inevitably be additional. It was not inevitably additional or even additional, because the money out of taxation was reduced in line with the extra money from fees.

Alan Johnson: I touched on this matter in an earlier debate, and I will repeat my point very slowly. The Dearing committee was set up in 1997. As part of its terms of reference, given by the previous Government, it had to consider the economic situation: what the Government could afford. Those terms of reference were important. By the time that we came into power in May 1997, the cuts were already in the system: a 6.5 per cent. cut in 1998-99 and 1999-2000. The previous Government had instructed the Higher Education Funding Council that that was the cut.
 Dearing said that the university sector could not afford another 6.5 per cent. cut and that there should be a 1 per cent. reduction in real terms. We implemented that recommendation, and our introduction of fees at the tail end of that helped to keep universities on a level playing field in terms of funding—or it might have helped us to get to the 1 per cent. cut. Either way, we inherited the previous Government's plans and accepted the Dearing report recommendation. As soon as we were in a position to put the extra money in, we did. That is why unit funding will grow by 7 per cent. in real terms in the period covering last year, this year and next year.

David Rendel: I hear what the Minister says, and it does not make any difference to my argument. There are two parts to the money that goes to universities: the fees part and the Government part. Those two parts can be decided entirely separately; there is no guarantee that any fees part will be additional to whatever the Government put in. Their contribution can be decided after the amount of money coming in from fees is known.
 Indeed, the Government contribution will inevitably be decided then. In terms of how much the universities will be guaranteed to get, it is no help to have the money coming in from fees rather than from the taxpayer. There will be the same overall amount of money, which the Government will decide. How the money is raised within that total does not matter in relation to the security of universities. 
 We have had plenty of time on this argument; it is time to move on. However, there is one more point that I would like to make on the subject. It is slightly worrying that my argument could be falsified only if the universities got all their money directly from the student. There would then be no way for the 
 Government to reduce their proportion in line with the increase in the amount raised from the students: there would be no proportion left to reduce. What worries me about the Minister's suggestion is that that is the long-term plan, as I suggested it might be a few days ago.

James Purnell: Will the hon. Gentleman give way?

David Rendel: No, I am afraid that I need to pass on quickly to what the Conservatives say.

Jonathan R Shaw: Will the hon. Gentleman give way?

David Rendel: No, I am sorry. I accept many of the strictures that the Minister pronounced on the Conservative position—or should I say lack of a position—on the issue of higher education, but I do not want to look a gift horse in the mouth. It was clear from what the Conservatives said that they were prepared to support us on this amendment. I am delighted that they do, particularly because there are one or two things that the Minister said about the amendment that are not quite correct.
 Amendment No. 106 states that 
''the qualifying fees . . . will be met from grants payable''. 
There is no question that the fees will be paid. It is not a matter of whether the fee requirements will be met or not, as the Minister seemed to imply. They will be met from grants payable, and therefore the money will be available to the universities. It will be secured in just the same way. I am delighted that the Conservatives will support that arrangement.

Chris Grayling: I suspect that the hon. Gentleman has inadvertently tabled a set of amendments that would have the interesting effect of creating a voucher system. Is that not correct?

David Rendel: I am not sure that that is exactly how I would describe it, but certainly our amendment does not remove the universities' right to levy fees in accordance with whatever regulation is available. However, those fees would now be met from the grants payable by the Exchequer.
 Question put, That the amendment be made:—
The Committee divided: Ayes 8, Noes 15.

Question accordingly negatived.

Tim Boswell: I beg to move amendment No. 260, in
clause 23, page 10, line 20, at end insert—
 '(5A) In imposing any condition under this section the funding body shall have regard to the position of part-time students.'.

Jimmy Hood: With this it will be convenient to discuss the following: Amendment No. 182, in
clause 38, page 17, line 9, leave out 'any part-time or'.

Tim Boswell: The Committee has just divided, but I hope for a degree of consensus on this issue. The amendment, however drafted, provides an opportunity for the Committee to discuss the interaction of the Bill with part-time students. I hope that I have already built a little consensus, in that, having moved a previous amendment alone, I have on this occasion the support of my hon. Friends the Member for Hertsmere and for Epping Forest (Mrs. Laing).
 I have tabled a virtually identical amendment to that of the Liberal Democrats. I assure them that I make no particular attempt to bag the front seat, and have no feline purpose in doing so, but I look forward to their support, if only because briefly, and in trying to seek consensus after our joint effort a moment ago, I can remind the Committee that my father actually knew Lloyd George.

Tim Collins: If my hon. Friend's father knew Lloyd George, he would know that the Liberals last won an election outright in 1906. In 1918, there was a majority of Conservatives in Lloyd George's Government.

Tim Boswell: It is nice to have that correction, but I think, Mr. Hood, that you would not want me to pursue it.
 While we retain a Welsh theme around St. David's day, I may also mention that I realise that we are dealing with an issue that is of considerable concern to the hon. Member for Aberavon (Dr. Francis). I hope that we shall genuinely be able to spark comment about it across the Committee—not least because the amendment, which is broad and contextual in its effect, brings together several institutions about which many of us feel strongly, and which we support. 
 The first of those institutions is the Open university. I claim very modest form in that area, because not only does it abut my constituency, but I used to give some advice and help on the formulation of courses in the early 1970s. It is an institution with which I have kept closely in touch, and for which I have considerable regard. It is a major player in British higher education and has been immensely successful. 
 I was pleased that another member of my party—I think it was my hon. Friend the Member for Westmorland and Lonsdale—made the point that the Open university was one of the few remaining successes, if not the only one, of the Wilson Government. It has worked and it needs our support and encouragement, which it will generally receive across the Committee. 
 The second institution of which I am a strong supporter—perhaps it is a little less fashionable for a Conservative to say this—is Birkbeck college. I visited it as a Minister when the master was Baroness Blackstone, who went on to other things in higher education for the Labour Government. [Interruption.] I heard that sedentary comment from the Liberal Democrats, but I will not pursue it. I recently returned to the college to see Professor David Latchman, and it is a first-rate institution. It is the main centre for face-to-face adult part-time education, and has a considerable reputation. The two institutions commend themselves to members of the Committee, and we must ensure that they are not destabilised by the Bill. 
 Another institution is the organisation known as the Campaign for Mainstream Universities. I can claim, on the back of my record and my continuing interest, that I have no reservations about the part of the market that the organisation adopts. I suspect that the distribution of part-time students is concentrated in so-called mainstream universities—some of the ex-polytechnics and other institutions—rather than traditional residential universities. However, the organisation has emphasised its concerns on the subject. The final institution, which none of us would wish to omit, is the National Institute of Adult Continuing Education, with which I have always had friendly relations, and I hope that the Minister and others will want to continue that. 
 There is no essential problem across the Committee about interest in or commitment to the subject of part-time students; the question is what we must do. One point that must be made, because part-time students have never had the saliency that they deserve, is what I call the double rule of 40 per cent. The first element of that, with which I am sure some members of the Committee will be familiar, is that more than 40 per cent. of students are part-time, so they are significant players. The second element, which is less obvious but is highlighted in the briefing from Birkbeck college, which draws attention to the studies conducted by the Higher Education Funding Council, is that there is a 40 per cent. cost loading for every hour of study delivered in part-time education because of its nature. Therefore, there are many part-time students, and it is more expensive to educate them for every hour—or unit—of study. I should say that that is not necessarily the case with distant learning delivery, for example through the Open university. However, that does not affect my argument. We must recognise that part-time students are major players with particular costs and characteristics. 
 I am conscious that it is important not too extend the debate too much, Mr. Hood, but I want to make a point about the nature of the scoping of the Bill. Whatever our view on the charging of tuition fees, it is clear that it will affect a regulated sector. That sector is not large but is hugely important, and the National Union of Students would be the first to remind me if I 
 said otherwise. There are part-time students, overseas students, postgraduates, and even a minority of students returning for a second undergraduate degree. In addition there are people at university for specific courses for continuing professional development. 
 In political terms, it is perhaps understandable that when we consider higher education, and when Ministers regulate it, we tend to think in terms of the full-time sector without recognising the wider context, of which part-time students are an important part. If we were to step back—in a way Ministers have done so in the debate—it could be argued that we could say, ''What is the problem? We are not legislating. They carry on as before''. I suspect that the Minister will seek to argue on that basis. It is clear to me and, I think, to most Committee members that the part-time sector is not regulated in terms of fees or conduct. If people really are delivering part-time education only, they are not required to go through the regulatory procedures—which would attach through the director of fair access—for institutions teaching some full-time students as well as part-time students. 
Alan Johnson indicated assent.

Tim Boswell: The Minister nods.
 What is the problem? In one sense there is not a problem. Even if there were a financial problem—a knock-on effect—it could be argued that institutions might be able to solve it for themselves by putting up their fees. However, a number of issues need to be drawn out, including student support. 
 Before I appear ungracious—or that is suggested—I should say to the Minister that the Government have already improved the situation of part-time students in relation to loans. I welcome that. The history of this debate, and the one that we shall have in a moment on disabled students and their facilities, is not one of total perfection under one Government and total dereliction under another. Often, in these areas of specialist interest, there is a period of gradual social advance with one Government doing one thing and another producing something else. I concede that straight away to the Minister. There is, however, an unresolved issue, to which we may have time to return in later consideration of the Bill, on the availability of student loans to mature students. I am not confusing all part-time students with mature students, although they are probably clustered there. I know that NIACE is particularly concerned about that and does not see why there should be a cut-off at 50 or 55. I have some sympathy with that view, although there are resource implications. 
 This afternoon I am concerned with the institutional impact, whether it comes through the student or the institution. Dealing with the student first, it is not clear what equity is driven by precluding the charging of fees to full-time students up front and recovering them later, but still enabling institutions to charge part-time students at the time they study, or, in theory, ahead of it. The Minister needs to consider that, bearing in mind that it is conventional to say that many part-time students may have other sources of income, may be 
 working or have a partner who is working, and may have other access to income. However, not all of them will be so well off.

Simon Thomas: Does the hon. Gentleman accept the argument, which has been put to me, that the level of fees that is now charged to part-time students—the £1,200, or whatever, which it is slightly different in Wales from in England—has a direct relationship with tuition fees as set by Government? There may be a real threat that this variable system with a ceiling of £3,000 will become the de facto benchmark by which part-time fees are set. That would have a serious effect in putting off entering part-time education those students about whom the hon. Gentleman is talking.

Tim Boswell: The hon. Gentleman makes a fair point about that fear, although in a sense it is contrary to my point. He is saying that the two things will track one another, which is likely to happen in the real world, even if the Minister thinks that it will not, or does not need to. There is also a concern about the overall equity of the position. I searched for NIACE's specific rubric on this. In briefing us originally on Liberal Democrat amendment No. 182 it said:
 ''The continued privileging of one mode of study over another without good educational or social reasons needs to be contested and explanations for its continuance challenged.'' 
That is the equity of the matter. The essential point was highlighted by NIACE in its original comments on the White Paper ''The Future of Higher Education''. It said: 
''the impact of the entire Paper''— 
the White Paper— 
''upon part-time students has not been adequately considered''. 
NIACE then urges the 
 ''Department for Education and Skills to undertake or to commission a detailed impact assessment as a matter of urgency.'' 
I shall return to that issue in a moment. There are potential inequities in the student experience that need an explanation or to be covered by a clause. 
 I come now to the institutions and, as I have already conceded in anticipation of the Minister's remarks, Birkbeck, the OU or any other institution offering part-time courses for part of its studies, including Oxford university in at least one case, can charge what it wants for that purpose. That is true. However, let us consider Birkbeck and the Open university, which have no full-time students. It is difficult to understand, first, how they will recover additional funds and, secondly, how they will stand in relation to their counterparts that can recover funds through the tuition-fee mechanism. 
 In one sense, I concede that those institutions will not directly lose out, but if other institutions are gaining, their relative position will be depressed. That is true in terms of access to tuition fee money and, for example, whether they can pay the going rate to secure a particular academic to work for them. Such matters will also affect indirectly whatever may happen to Government funding because, if the Government either match tuition fee income and take it into 
 account or otherwise and the universities have no access to it, they will be relatively disadvantaged. That important point must be considered. 
 It is impossible to look at the position of important part-time students of which there are many without reference to what the Government are doing for full-time students under other parts of the Bill. Even if that had no direct impact on the clause, it would have an indirect knock-on effect. In a sense, the Government recognised that, which brings me to my final point. On the day that the Bill received its First Reading, the Secretary of States announced that the Minister for Lifelong Learning, Further and Higher Education and the Higher Education Funding Council would 
''consult on ways in which the funding system might further support the development of part-time study in higher education''. 
I was pleased about that announcement. I think that everyone was. It might have encouraged the support of one or two of the Minister's hon. Friends for the Bill on the night. Whether or not that is the case, it is still a worthwhile assurance. The right hon. Gentleman then answered a written answer tabled by the hon. Member for Forest of Dean (Diana Organ) who asked specifically about his assessment of the ability of Birkbeck college and the Open university 
''to compete with other higher educational institutions'' 
in the new context. The hon. Lady went on to ask about the Government's investment plans and whether they were included in the Higher Education Bill. The Minister's answer was helpful to a point. He said: 
 ''The Government do not impose restrictions on the fees that may be charged for part-time undergraduate students''— 
He has dropped out of such matters for which I do not blame him. I do not attribute to him a sinister motive— 
 ''The Higher Education Funding Council for England will shortly be conducting a comprehensive review of how their funding for teaching is allocated.''—[Official Report, 23 February 2004; Vol. 418, c. 212W.] 
That is a slightly more narrow formulation than that which appeared in the Secretary of State's statement when he introduced the Bill. He said that the Minister and the Higher Education Funding Council will 
''consult on ways in which the funding system might further support the development of part-time study in higher education.''—[Official Report, 8 January 2004; Vol. 416, c. 419.] 
We have heard in a different context about what might be termed mission drift in relation to various public inquiries that are under way at the moment. I understand that moving from a wide remit to a narrow one could cause difficulties for Conservative Members. I do not issue a threat about that. 
 What I want to say to the Minister in all seriousness and in a non-partisan way is that I know that NIACE wants more details about the parameters of the consultation, who is going to be consulted and what processes may be used. I share that wish. It would wish—again, I agree with it—that an inquiry of this kind should have an independent chair, a broad membership and a wide remit. It should also tie part-time study to the individual student and their fate—
 their situation—and consider the contribution that all part-time study may make collectively to the widening participation agenda. 
 It would not be a caricature of NIACE's position to say that it wants a full and open inquiry that would look at the whole context that I have described, rather than a confined study undertaken by officials and staff of the funding council. That is in the Minister's interest, in the interest of widening participation generally and in the interest of some of the wider social objectives that I am not questioning here. It is important that we look after part-timers. We should look after the institutions that deliver study to them. We should not put them in either a privileged or an unfair position, and we should not make the position of their institutions too difficult. 
 Veterinary students are the only category of student not represented by part-time study. Professor Alan Langlands is looking into entry into professional and vocational training. That is a defined study that is outside the narrow remit. It is an important subject, not only for legislation. The more he can open up the inquiry and make it worthwhile, the more it will be in the wider interests of higher education, as well as in the important and often overlooked interests of part-time students—even if there are resource implications down the track.

Hywel Francis: I begin by paying tribute to the hon. Member for Daventry for a thoughtful and generous contribution on the subject of part-time students.
 You may recall, Mr. Hood, that we met 20 years ago during the miners' strike at Ollerton miners' welfare club in Nottinghamshire. That place has a direct bearing on the amendment. Such clubs, then and now, are places of part-time study—informal and formal. I have spent most of my working life in adult education, now more fashionably called lifelong learning. It is part-time study for adults. 
 The amendment gives hon. Members an opportunity to seek responses from the Minister. I believe that he will confirm the Government's commitment to strengthening lifelong learning, and, more specifically, widening access to higher education, particularly for part-time and adult students. As we have heard, part-time students now account for 44 per cent. of all higher education students and that proportion is growing. I suspect that, within the decade, they will form the majority of students in higher education. 
 I raised some of those issues in my Adjournment debate last year, when I spoke recently in the debate on Queen's Speech and in my early-day motion that attracted the support of 168 hon. Members, several of whom are here today. 
 I am also conscious of the Welsh dimension and how devolution has impacted positively on developments beyond Wales, particularly with the Assembly learning grant, which now supports part-time 
 students.As it is so close to St. David's day, let me begin with my roots, as all good Welsh men and women should.

James Clappison: Can we have a song?

Hywel Francis: Not today.
 Through my association with the Community University of the Valleys, which recently celebrated its 10th anniversary, I am conscious of the specific needs of part-time students. We started where the prospective students were, with community-based and negotiated learning, community access courses, partnerships with further education and community groups—particularly women's groups—study skills, information and communications technology guidance, transport, and creche support. However, prospective students mostly need financial support, particularly fee waivers. 
 The Bill will give the Assembly greater scope to provide financial assistance to students, particularly part-timers, through the transfer of student support. The widening access scheme operated by the Higher Education Funding Council for Wales already provides a fee-waiver system for unemployed students, and the financial contingency fund provides a waiver for part-time students who become unemployed while on a course. More specifically, and unlike in England, support is also given to those in Wales who study the equivalent of less than half of a full-time course. 
 In England and Wales, we have the wonderful legacy of the Open university, which was founded by a Labour Government in 1969 and was recently described as the jewel in the crown of British higher education. I think that we all agree with that. Since 1997, the Government have placed lifelong learning at the heart of their public policies, from Sure Start to Learndirect, with a great deal in between. In England, last summer, we were delighted that the Government made financial commitments to part-time students for the first time. In January, they announced that there would be a full student income and expenditure survey in 2004-05 to give a more accurate picture of part-time students' financial position. I think that we all welcome those important developments. 
 I move on to questions of policy development. Broadly speaking, the Bill makes no specific provision for access to grants, loans and bursaries for part-time students. I was struck by Mark Day's article in the Labour party magazine Progress in February, in which he stated that 
''part-time students will continue to have to pay their tuition fees upfront''
 and that 
''fees for part-time students will continue to be determined by an unregulated market.'' 
He also pointed out that 
''institutions that specialise in the provision of part-time higher education . . . stand to gain nothing from the extra £1 billion'' 
that will arise from the reforms. 
 The Bill excludes part-time students from OFFA's remit and means that part-time fees will no longer be pro rata in comparison with full-time fees. It is erroneous to assume, as many do, that most part-time 
 students' fees are paid for by their employers. It should also be recognised that part-timers usually have greater family and mortgage responsibilities and, therefore, that the issue of deferral is fundamental to them. If we do not recognise those things, we may diminish rather than widen access. 
 I have five specific questions to pose to the Minister, so as to confirm the Government's commitment to lifelong learning and to ensure that part-time students are very much part of the higher education landscape. First, I understand that Professor Howard Newby of HEFCE said that it will take at least three years to complete the review of how the funding system can better support part-time students, which was announced by the Secretary of State on 8 January. To indicate serious intent, would it not be helpful if the Minister or the Secretary of State encouraged HEFCE to have a limit of one year or 18 months? 
 Secondly, rather than HEFCE and DFES officials undertaking the review, should it not include some independent voices, particularly prospective students or advocacy bodies like NIACE and the Universities Association for Continuing Education? I should declare an interest, because I was associated with both of those bodies in my academic career. The further education sector should also be part of the process, and other parts of the United Kingdom. We can learn from devolution, surely? There might be case for reconstituting the national advisory group for continuing education and lifelong learning. I was a member of that in 1997, though I do not anticipate that I would be called back. We therefore need some kind of Kennedy or Fryer committee; that ethos should be there to undertake that work. 
 My third question is: could the consultation include a consideration of whether funding systems for further and higher education throughout the UK help or hinder the development of part-time study and make recommendations accordingly? 
 Fourthly, and perhaps most important of all, we have the jewels in the crown. I respectfully seek assurances that the distinctive missions of the Open university and Birkbeck will be protected and enhanced as a result of this Bill. That should be done through special measures if necessary, if the intended effect of variability for full-timers destabilises the system, which is quite possible. 
 As a final request, could the Government, not HEFCE, monitor higher education courses in FE? This vital provision at the very local level very often provides the only opportunity for adult students to study near home. It is the exact opposite argument to the one we have often heard in this debate. After all, the right to study anywhere is not a right at all for part-time and adult students.

Phil Willis: It is a pleasure to follow the hon. Members for Aberavon and for Daventry, both of who speak an enormous amount of sense in a very measured way on the whole issue of both further education and part-time students. The hon. Member for Aberavon particularly has the most impressive record in fighting this cause, in this House and beyond. I do not want to add a great deal to what they have
 said. Indeed, the hon. Member for Daventry has gone through virtually the whole of the NIACE briefing notes, leaving me somewhat bereft of comment. I thank him for that; he has been most generous.
 What is interesting, why this is an important debate and why I am grateful to the hon. Member for Aberavon for asking the five questions that he did, was that all of us, when we saw the White Paper, were concerned that so little had been done to address the part-time student situation. Secondly, when the Bill appeared, the only real reference to part-time students was in clause 38(1), which excludes part-time students from the Bill. I am sure that that was not the Government's intention, because the Secretary of State made clear his intention to expand provision for both part-time student support and to enable institutions themselves to access resources for part-time students. The question we have to ask the Minister is the important one to which NIACE referred. Why have part-time students been excluded from the provisions? Why are they not covered by the provisions that apply to full-time students? Why is the Bill geared to 18 to 21-year-olds, who seem to dominate our thinking about higher education, rather than to most students in three to four years? Some 42 per cent. of students in higher education are part-time, and that percentage is likely to increase dramatically. I hope that before the end of this debate, the Minister will say what plans the Government have to address that issue in the long term. None of us, including the hon. Member for Daventry who often speaks on this issue, or the hon. Member for Aberavon, has come up with a proposal that would provide the funding needed to address this major question of the funding gap. It would be helpful if the Minister could let the Committee and the House know what are the costs of extending to part-time students the provisions that apply to full-time students. 
 There is no doubt that the Government have made progress. The 50 per cent. grant support for part-time students on incomes of less than £21,500 is a huge step forward, and it would be disingenuous of us not to accept that. However, the approach should not be piecemeal. The hon. Member for Aberavon rightly said that the Bill is directly aimed at full-time students and that, in many ways, part-time students need their own Bill to examine how we will deal with them, given the extent of the problems that they face and the extent of the provision that will have to be made for them in the future. 
 There is an enormous number of myths about part-time students. As the hon. Member for Aberavon said, the idea that all part-time students who are in work simply have their fees paid by their employers is absolute nonsense. One in five part-time students may get their fees paid by their employers; the rest must find the money for the fees themselves. Invariably, those students are not at the top end of the earnings scale. Quite often, they are at a fairly low end of the earnings scale, yet access to higher education and a higher 
 education qualification will give them access to the higher end of the earnings ladder. That myth must be knocked on its head. 
 The idea that most fee-paying students who are studying part-time are simply hobby students is also nonsense. Most students whom I meet who are studying part-time are doing so because they did not obtain the necessary qualifications at school, or because they are part of a significant proportion of students who have a level 3 qualification but who choose not to go to university. Most of these students have taken the vocational route up to level 3, which they see as a glass ceiling. We need to knock that myth on the head, too. 
 Finally, there is the myth that part-time students are rich and are in jobs in which they can afford all this education. Under the Government's proposals, if we extended the current system for full-time students to part-time students, part-time students would be means-tested to determine the fees that they would pay. There is therefore no major reason not to extend those provisions to mean-test students. That would not be Liberal Democrat policy, but the Minister might consider it. 
 The Liberal Democrats, to a large extent the Government and, to be fair, the Conservatives when they were in office, have all skirted round the issue of part-time students. The issue is of increasing importance, and we should all address it. We support the Government's work in extending level 2 access for all adults up to the age of 55. We applaud the fact that more students will have access to level 3 qualifications, free at the point of delivery on a regional basis, according to sector needs. That is a major move forward, but we must extend level 3 and 4 qualifications, too. 
 This is a probing amendment, and we hope that the Minister will respond to it positively, so that we can join with him and, indeed, the Conservatives in ensuring that we have a policy on part-time students that is as good as anything that we can produce for full-time students.

Chris Grayling: I rise to support my hon. Friend the Member for Daventry and to echo some of the sentiments expressed by him. This is an extremely important part of the Bill in terms of how we should like the Bill to be redefined and redrafted, because the one measure that is conspicuously absent relates to part-time students. As we have heard, they represent 40 per cent. of those in higher education and they are an exceptionally important part of our HE sector, not least because what the part-time sector delivers is absolutely in line with the Government's central strategy.
 Part-time studies through institutions such as the Open university and Birkbeck college and part-time courses provided by other higher education institutions throughout the country do more to widen participation in higher education than anything done in any other part of our higher education system and anything that could be done by the Government's 
 proposed access regulator. Therefore, the absence of greater focus on part-time studies in the White Paper, the absence of a part-time dimension to the Bill, and some of the shortcomings that the Bill represents for the part-time sector are greatly to be regretted. 
 I listened carefully to the Secretary of State's pronouncements on Second Reading, including on the review that he plans to set up, but I am fearful. Given that, in the run-up to the crucial vote on Second Reading, a range of concessions was made in a variety of directions—raw meat was thrown to the masses—how confident can we truly be that the review will be a comprehensive and emphatic analysis of part-time education and its needs?

Tim Boswell: I thank my hon. Friend for his kind comments. Has it occurred to him that if we heard the hon. Member for Aberavon aright and there is to be a three-year time scale for the review—it must itself be a part-time activity—it will take longer than the whole of the Dearing commission?

Chris Grayling: Absolutely. My hon. Friend is right, and of course three years from now is well beyond the introduction of top-up fees and well beyond the practical reality of some of the shortcomings that cause so much concern to those who are active in part-time higher education and in the institutions that deliver so much quality education to so many people. I shall touch on some of those issues this afternoon.
 Fundamentally, although the Government should be considering a variety of questions, two major issues arise from the Bill and appear to leave injustices and flaws in the direction of the part-time student sector. The first relates to the support for part-time students. The point has been powerfully made by those in part-time study and their representatives that it does not seem fair and appropriate that part-time students who earn less than the earnings threshold that the Government are using to assess student support for full-time students have to pay their fees up front, whereas full-time students will be able to defer payments until they are earning above the threshold. The reality is that that is a serious injustice in the eyes of many who are in part-time study or who plan to enter part-time study in future. One can have some sympathy with them because, although in a college such as Birkbeck many people have professional roles and are taking degree courses to enhance their skills and move up a rung on the career ladder, very many people studying for part-time degrees are doing so from relatively humble means because they want to take their own step up the social ladder. The Government must be mindful of their situation. There is strong message coming out of the sector that that is an injustice that needs to be righted. The Government have not got it right for those students. 
 Although we debated the need for universities to receive more money, the Bill will provide additional funding for the full-time higher education institutions, but the two principal providers of part-time study—the Open university and Birkbeck college—will not benefit at all. Many institutions provide a package of part-time learning alongside their full-time studies. 
 Birkbeck college and the OU fear that they will be disadvantaged in relation to those competitors who will be able to strengthen their part-time offer by pooling the funding that they receive and deploying some of it into the part-time arena. They will have no access to additional funds at all as a result of these measures and they perceive that as an enormous injustice. 
 The Government will not want to see a weakening of those institutions or of their role in moving people step-by-step up the ladder of achievement. The evidence is that they make a significant contribution to help people advance their careers. A stark figure quoted in a recent report is that 54 per cent. of students who completed their part-time courses at Birkbeck received a wage increase, with the median increase being 27 per cent. These institutions make a major difference to people's lives. 
 The hon. Member for Nottingham, North rightly describes some of the social issues that his constituents face and the low levels of participation in his constituency. He also pointed out that as people move on beyond education it is sometimes difficult to claw back the lost ground. One of the best avenues open to those who wish they had done GCSEs and A-levels and then gone on to university is to study part time. In later life it is often simply not practical for people to give up three years to go into full-time education. They may have a family or the problem of affording their mortgage repayments or their rent. 
 The opportunity to study part time is enormously important. It can make a powerful difference to people who have been left behind by the education system. We must ensure that the institutions that provide the core of our part-time higher education system are not left behind as a result of the changes brought about by the Bill. They are worried that that will happen.

Graham Allen: Would that not become even more important if the £3,000 grant were abolished, a policy that we understand may emanate from the Conservative Benches? That would reduce the number of such students in full-time education and push even more of them into part-time education, which the hon. Member for Daventry described as an unintended consequence of Tory policies.

Chris Grayling: The hon. Gentleman continues to labour under the misapprehension that after this process those less well-off students will be better off. The amount of money that they have in their pocket while going through university will not change. They will leave university having had the equivalent amount of support that they had previously and still have the same amount of debts. The hon. Gentleman should sit with his spreadsheets and his pocket calculator and think it through properly. It is an illusion to believe that the Government's proposals are suddenly going to yield a huge extra sum of money for these people. All the Government are doing is compensating them for the fact that they are going to have to rack up substantial debts because they will be paying higher student fees. The reality is that they will have no more money in their pocket—

Jimmy Hood: Order. The hon. Gentleman is straying from the amendment.

Chris Grayling: I am happy to accept that clarification, Mr. Hood. The hon. Member for Nottingham, North tempted me, and I shall to try to avoid letting him do so again.
 Birkbeck and the Open university have wisely pointed out that even some of the changes that have been announced are not as helpful as they may at first appear. For example, the Government proposal to replace discretionary fee waivers with guaranteed fee support for students on low incomes is capped at a maximum of 50 per cent. of the present full-time fee. Students whose fees are greater than that will face a shortfall. 
 Sitting suspended. 
 On resuming— 
 [Mr. Roger Gale in the Chair]The Chairman: Before we start the evening part of our sitting and resume the debate that was under way, I should point out for the Committee's convenience that when the Division bell rings at 7 pm I shall suspend the sitting for 15 minutes, or until 15 minutes after the start of the last Division. I am informed that there are likely to be at least two Divisions, so the Committee will effectively be suspended for some time.

Chris Grayling: Welcome back to the Chair, Mr. Gale. You have arrived in the middle of an important debate about part-time students, who, as has been said, comprise 40 per cent. of the total number of students. The part-time higher education sector also plays an important role in widening participation and in enabling people who did not finish normal education when they were younger to progress to higher education in later life and thereby to enhance their qualifications. This is an important debate about an important sector in higher education.
 When the sitting was suspended, I was saying that a number of the Government's concessions to the sector in recent weeks, such as the proposal to replace discretionary fee waivers with guaranteed fee support, are less advantageous than they at first appear. The message from the sector to the Government is: please think again carefully about the implications of such proposals. The guaranteed fee support that would replace discretionary fee waivers is capped at a maximum of 50 per cent. of the present full-time fee. As a consequence, students whose fees are greater than that will face a shortfall, yet under the previous scheme, with the previous discretionary fee waiver, their fees would have been fully funded. That is one example from a series of complaints that have been made by the sector on behalf of institutions and their students. 
 At a time when the Government's focal point is the full-time higher education sector and the White Paper discusses a number of issues, but not part-time 
 students, we call on the Government to ensure that the part-time sector is given proper attention in the coming years. During your absence, Mr. Gale, I raised a caveat that I wish to enter about the review that the Secretary of State announced on Second Reading. I hope that that announcement was not another example of red meat being thrown to Back Benchers in the hope of securing their votes, but a genuine initiative to examine the issues that part-time education faces. 
 Hon. Members, including me, have talked about the Open university and Birkbeck college, but that message is coming from the residential, full-time university sector as well. Although institutions in that sector are not primarily involved in that format, many have an increasing part-time dimension to their work. Campaigning for Mainstream Universities said in its submission to the Committee: 
 ''A review should be undertaken with a view to introducing an equitable (with full-time students) system of funding.'' 
In addition, Universities UK says that it is 
''keen to work with Government to ensure that more attention is given to this significant part of the higher education sector in order to ensure that the interests of part-time students and of institutions which cater for them are properly addressed. This is an issue of public policy and should be addressed through the public funding element of the support for institutions.'' 
I hope that the debate that my hon. Friend the Member for Daventry has started will give the Minister an opportunity to set out his vision for part-time students. I hope that the Minister will feel able to accept the spirit of the amendment, if not the amendment itself. My hon. Friend has made a contribution that would not materially affect the Bill's general direction. Rather, the amendment would serve as a useful reminder that the Government have a duty to more than just the full-time student sector. 
 I conclude with an important example of why I think the part-time sector, as represented by the Open university and others, is such an important dimension of this country's education system, and why the Government should bear the following caveat in mind before they push too far down the conventional residential university route. When I visited the Open university recently, it briefed me on a new course that it recently launched: the early years sector-endorsed foundation degree. That is a new vocational higher education qualification at level 4, targeted at the early years sector, which consists of people who work in nurseries, pre-school groups and in that general environment. 
 The university's presentation about the scope of the course was interesting, and the nature of what it was doing was clearly flexible and relevant to its marketplace. I asked it who its competitors were in providing that particular qualification, and it said that they were the main universities. I sought clarification from the Minister for Children, who replied that 44 universities and 96 affiliated colleges now offer that particular degree course, which was more than I expected. 
 That response, however, made me anxious. Here is a sector that is not well paid and that is never, in my view, going to be well paid. One does not go to work in a pre-school environment, running a playgroup or a small nursery, in the hope of making a large amount of money. It is the kind of career one chooses because of a genuine desire to work with children and the pleasure gained from doing so. Some very good, dedicated and committed people work in that sector. 
 However, if those people were pushed through a conventional degree course over a two or three-year period, with all the expense of being a student, running up high living costs—accommodation and so forth—and they then had to bear the additional £3,000 a year burden proposed by the Government, the result would be a group of people emerging from a university course who have invested a significant financial amount in their education but who are returning to work in a sector which is not highly paid. 
 What impressed me about the Open university option was that it is quite clearly an alternative avenue for those people. It offers them a chance to pursue that same qualification, but on a modular and part-time basis alongside their work. When they have finished, they will have their qualification and they will have carried on working. They will not face high levels of student debt, and they will not have spent huge amounts on accommodation and living costs. 
 I thought that that package was enormously impressive, and it brought home to me just how much of a role the part-time sector and the distance-learning sector, as pursued by the Open university, can play in our higher education system. It can provide a real alternative to those parts of our economy where the so-called graduate premium the Government talk about is far from evident to those who work in it.

Tim Boswell: Does not my hon. Friend agree that the same considerations apply in relation to initial teacher training? Of course, the Government include those particular courses—and only those—within the Bill.

Chris Grayling: Absolutely. My hon. Friend is right, and I can think of a number of other areas where the same consideration applies, with people going through the higher education sector into relatively low-paid areas of society. They pursue vocational roles because of their desire to work in a particular area, such as working with children, with the elderly and in care homes. More and more qualifications are available in these areas, but studying on a full-time basis may not suit everyone's individual needs. That is why the part-time sector is such an important part of a higher education system. It provides not simply a real opportunity for people to gain qualifications in later life, but an alternative model for some young people who, the Government argue, should have greater qualifications but who will not necessarily be compensated by the pay they get for the investment that they have made in their education.
 The hugely important part-time sector is as big as our full-time undergraduate sector, which is the focal point of so much of the debate in this Committee and the Government's White Paper. I hope that the 
 amendments will provide the Minister with an opportunity to state clearly his commitment to part-time higher education, the institutions that provide it, and the students who benefit from it. I hope that he can give us a clearer sense that the review he plans will be substantial, that he will place part-time higher education at the heart of the Government's policy for the future, and that it will not be just a Cinderella in the sector.

Alan Johnson: I congratulate the hon. Member for Daventry on raising the issue. He has an extremely good record of pursuing the interests of not just part-time students, but disabled students—we might have a chance to talk about them later. I also appreciated the comments of my hon. Friend the Member for Aberavon, because he has an expertise that, as the hon. Member for Harrogate and Knaresborough said, is incomparable. His work on behalf of part-time students over a long period has been enormous.
 I was hoping, until the hon. Member for Epsom and Ewell spoke, that I could agree with every word that everyone said in this debate, which would be extraordinary, considering that it was a cross-party debate. Unfortunately, the old political football game came bouncing in at the end. I point out to the hon. Gentleman that the proposal to give a grant and fee remission did not come about in the last few weeks; it was part of the proposals in the White Paper published last January. That measure comes into effect this academic year—2004—so it would have been a bit late to announce it a couple of weeks ago. It has always been part of our plans.

Graham Allen: Will my right hon. Friend the Minister make it absolutely clear that the £1,000 assistance comes in this September? Many hon. Members might not realise that. It may be worth underlining, so that everyone gets the message.

Alan Johnson: In an extraordinary fit of generosity, the Government are introducing £1,000 of the grant for full-time first degree undergraduates next academic year, which starts in September 2004. We are also introducing the £575 fee remission for part-timers and the £250 grant this year.

Graham Allen: I am grateful for that clarification. I will go away and think about whether I will support that, because I do not think that it was in our manifesto.

Alan Johnson: My hon. Friend makes a pithy point that is much appreciated.
 The hon. Member for Daventry said that he expected me to say, ''What's the problem?'' I will not say that. I will try to build on what other hon. Members have said and re-emphasise their points. There are problems. The two amendments are not the answer to them, but that is an entirely different thing. 
 The issue of student support to part-timers has been a closed door; it has not been addressed properly. Voluntary fee remission arrangements were not working well. There has been nothing from a central 
 Government of any political persuasion that has provided any support to part-time students. That is one problem. 
 Problem number two is that the funding mechanism in England, Wales and Scotland does not reflect the true economic costs of teaching part-time students. That is an important point. It would have been important 20 years ago, but now the edges between full-time and part-time education are blurred, and it is becoming increasingly difficult to ascertain what is a full-time and what a part-time course. On top of that, students are opting for modular courses that mean that they dip in and out of higher education. That, of necessity, means that they are studying part-time. 
 None of those problems is reflected in the funding mechanism. To be fair about the points made, another problem that higher education institutes would say existed in relation to part-timers is that, although there is a mechanism in the Bill to introduce fee remission, we do not extend it to part-timers. That is a perfectly valid point. However, of course, if the Bill is not passed, there will be no mechanism for fee remission on to which we can attach part-timers. That is why the Open university is on record as saying that it supports the Bill and, judging from discussions that I have had, so does Birkbeck. Those are the problems, and we set up the HEFCE review to find solutions. 
 I shall answer all the questions asked by my hon. Friend the Member for Aberavon, but one, which was picked up by the hon. Member for Daventry, was whether the review will take three years. It will not. HEFCE says that it will take a year to conduct the comprehensive survey and review, but it has promised—an important promise for the higher education sector—that there will be no disturbance of funding arrangements for three years. Because we are considering part-timers, and there is a pot of money to be distributed, the reference to three years concerns the stability of funding. HEFCE says that, although the review will probably be over in a year, it will not be introduced for three years. That is probably right if one considers the ramifications of what will emerge from what is not just an examination of funding for part-timers, but an examination of funding per se. It is being conducted under the so-called transparent approach to costing system. 
 HEFCE has clearly said that the comprehensive review of how funding for university teaching is allocated will have a major focus on how the funding system might further support the development of part-time study. That is a central feature of the terms of reference for this study. I should be surprised if that does not go a huge way towards solving some of the problems with the institutional, formulaic, mechanistic funding from the funding councils. I shall say a little more on that when I come back to my hon. Friend's questions. 
 The other point, rightly picked up by all members of the Committee, concerns student support. The simple fact is that the Open university, which is by far the largest university in the country—incredibly, it has something like 28,000 students—was never included in 
 the student income and expenditure survey. The largest chunk of part-timers was never part of that survey; indeed, part-timers did not figure very much in the survey at all. I think that a few were included, but leaving the Open university out was a major factor behind the Department not having the information. We know where part-timers are; however, we do not know enough about their circumstances, which is why myths develop. Those myths were mentioned by the hon. Members for Daventry and for Harrogate and Knaresborough and, in particular, by my hon. Friend the Member for Aberavon. If we have done anything in this debate, hon. Members have exploded some of those myths. I do not need to go over them again, but one myth is that that part-timers all have high incomes, and are pursuing an old hobby when they are retired. That is an important part of some part-time courses, but it is not where part-time study is now. It is important to remind people of that, because it is an important way of solving the problem.

Anne Campbell: As the Minister was speaking, I was wondering about the position of students who are studying through learning direct, or the university for industry, which was set up by this Government much more recently than the Open university. Does he anticipate any means of support for those students?

Alan Johnson: I envisage means of support for all part-time students. The important message that we must impart is that it is wrong to suggest that the White Paper did not refer to part-timers: it did. It is wrong to suggest that the Bill does not refer to part-timers: it does. It is, however, fair to say that we have not paid sufficient attention to adult learners, which mainly means part-timers, or to part-time study. We must start to address that now. I said that it is wrong to suggest that the White Paper did not address part-time students because of the issue of the grant. I have no doubt that someone has written to the hon. Member for Epsom and Ewell (Chris Grayling) about the fact that the grant and fee remission is a problem, but it has not been represented to us by UUK or CMU, which wrote an interesting letter to the Committee, nor by the Open university or Birkbeck.
 The £575 fee remission is very much based on the fees paid by part-time students. In fact, of the 132 institutions that deliver part-time course, only two charged an average of more than £1,000 in fees—the £575 is a part-time equivalent. Another 32 per cent. received no funds from HEFCE to award fee waivers; and 43 per cent. charged between £266 and £575. That includes the Open university, 71 per cent. of whose students are part-time. 
Chris Grayling rose—

Alan Johnson: The hon. Gentleman is obviously bursting to intervene.

Chris Grayling: I hope that the Minister is not too locked up in his ivory tower; my source was the master of Birkbeck college, who wrote to me last week. He
 seems to be engaged in a different conversation from the Minister. Perhaps he and the Minister should have a further conversation.

Alan Johnson: He might be, but no one who has dealt with higher education institutions can say that they are seething with discontent about the introduction of that level of fee remission.
 Only two institutions charge more on average than the fee remission that we are introducing. On top of that, we have made arrangements for access to learning fund to be used, so that those students who were paying more in fee remission can meet the full costs of the fee remission. That is usually at the top end, the most expensive end, which is where employers often contribute to the fees, and we do not want to stop employers doing that, or to substitute taxpayers' money for something that employers are quite happy to pay for. The £575 is therefore not a reduction. 
 In total, the £825 in funds and fee remissions is, as the hon. Member for Harrogate and Knaresborough said, a huge step forward. It is the biggest advance in support for part-time students that we have ever seen. Of course, we would always like to do more and to go further, but we should recall that fact. The inclusion of part-time students in the student income and expenditure survey this year, particularly those at the Open university, will give us more information on which to base further student support for part-timers. Subject to financial constraints and so on, we should go further along that road. It is another important element. 
 My hon. Friend the Member for Aberavon asked whether the HEFCE review would be conducted only by HEFCE or whether others would be involved. It will be an open consultation; it will be published on the website and everyone, including the National Institute of Adult Continuing Education, which makes an enormously important contribution, the National Union of Students, the Open university and Birkbeck, will be involved. It is not a UK-wide consultation, because Wales and Scotland have separate funding councils. My hon. Friend spoke about best practice elsewhere. I am sure that HEFCE will consider best practice elsewhere, but it cannot undertake a UK-wide review. However, it is right that it should conduct a review. I am not saying that there will not be a time for a modern version of the Kennedy report, but my hon. Friend spoke about it taking a year. HEFCE is responsible for funding, but rather than having to be convinced by a separate report on which HEFCE will have its own views, it will be quicker and more satisfactory to involve other outside agencies. 
 My hon. Friend also said that the distinctive mission of the OU and Birkbeck should be protected if the measures have an adverse effect. First, one of the terms of reference of the independent review, which will report to Parliament three years after the introduction of variable fees, is its impact on part-time students. Secondly, section 66(3)(b) of the Further and Higher Education Act 1992 provides that, in exercising their functions, the funding bodies shall have regard to the desirability of maintaining
''any distinctive characteristics of any institution within the higher education sector''. 
The shorthand is that Birkbeck and the OU have distinctive characteristics, and the funding council, aside from the review, has to consider that fact if the introduction of these measures causes problems. 
 One thing that Birkbeck, the OU and the whole of the sector would not thank the Committee for would be including part-timers in regulation. The hon. Member for Epsom and Ewell said that the Bill does not apply to part-timers, but it does. Student complaint measures apply to part-time students, and the fee deferral clause has the power to be applied to part-timers. We do not intend to allow fee deferral for part-timers at this stage, but I shall say a little more about that later. 
 The provisions that do not apply to part-time students are about fee regulation, because those students are not regulated. I doubt that the hon. Member for Daventry is making a case for part-time students to be regulated, and it is not a problem that has been identified. Student support is a problem, but regulation is not. With full-time undergraduates we are moving into a market in which there are no fees above £3,000, but with part-timers we are moving into a market in which fees are spread between £266 and £2,000. That is a vast range, and we would probably need to set the cap at the maximum to avoid causing problems to employers who are happily paying the higher fees. For many different reasons, that would be the wrong route to take, although I understand that amendment No. 182 is a probing amendment. 
 The problem with amendment No. 260, which was tabled by the hon. Member for Daventry, is that it would have no legal effect. It provides: 
 ''In imposing any conditions under this section the funding body shall have regard to the position of part-time students.'' 
I am sure that it is only a probing amendment and that the hon. Gentleman knows that it has no effect. There is also a technical flaw. I shall not bore the Committee with the details, but it concerns the fact that it relates to clause 23, which deals with the conditions for funding.

Chris Grayling: The Minister says that the Bill is not about part-time students, but one example of the importance of part-time students concerns the monitoring by HEFCE—the funding body—of progress towards a plan for widening participation. Does he not agree that an institution might decide that the best vehicle to widen participation is the greater provision of part-time courses? That would be a material fact in deciding whether an institution is making progress towards its targets in the plan, even though the progress is in the part-time rather than full-time arena.

Alan Johnson: I thought that the hon. Gentleman was saying that part-timers were not part of the Bill, as I was saying that they were. There are some complications with his example, but he is right that they figure to a certain extent in the arrangements for the director of fair access, which we shall discuss on Thursday.
 My final point is about fee deferral. The hon. Member for Harrogate and Knaresborough asked for a cost on that. I do not know it, but I shall find out and let him know. He will appreciate that following the same route for part-timers would incur a considerable cost. There is only so much in the pot, and we are trying to ensure that we do a lot of things, including investing in student support. If there is any extra money, we will have to make a decision on whether student support comes before fee deferral and we will need to ensure that there are no hiccups. 
 In general, however, the hon. Gentleman makes an important point. If we examine the level of fee deferral, we will have to consider part-timers and what they mean in the 21st century as opposed to what they were 20 or 30 years ago. We must not for a moment suggest that any failure is happening in this thriving market. The number of part-time students in higher education increased between 1998-99 and the year for which the latest figures are available from 594,000 to 681,000. 
 It is a vibrant, expanding market, and I say with no particular licence that we need to consider this issue in the future. As the Secretary of State said on 8 January, we are keen to place part-timers at the centre of our consideration on student support on the future of higher education and on the funding mechanisms. I do not think that the amendments do that, but as they are probing amendments I hope that it gives hon. Members enough confidence that the first three speakers at least are in absolute harmony about the importance of this part of the sector.

Tim Boswell: As the Minister rightly said, it is a probing amendment. It is also a technically defective amendment but, despite that, it has generated a positive debate. It has been worth while coming on to the Committee just for the privilege of listening to it and playing a part in it. It is an important issue and the most significant thing is that the Minister has given his commitment and therefore that of the Department to address it. It is not without problems and we need not debate the difficulties now. I found it useful that he was able to clarify the HEFCE study considering any perversity within the funding model or any anomalies relating to the business of delivering, costing and remunerating appropriately part-time study.
 I turn to student support. The Minister drew some clear and interesting distinctions that will repay further study, but seemed plausible as he produced them. He acknowledged that there are difficulties. I equally acknowledge that he is trying to move some of these discussions forward. I also accept the points he made about openness, which will help to satisfy the National Institute of Adult Continuing Education and the other interested parties. 
 I put to the Minister as a coda before withdrawing the amendment that there will be a stage at which we are better informed. Our discussion has helped in informing the debate, but beyond that he will have the HEFCE study and the student expenditure study. At that point, if no one else does and he is still in post, he will need to grip the issue and take it forward. 
 The difficulty is that there will almost certainly be resource implications later. There will be trade-offs, as he said, not merely with part-time students but in relation to the whole shooting match, which must be considered. However, the healthy part of the debate and perhaps of many of the discussions in Committee is that there is a strong commitment to doing something. We recognise the efforts made by people studying part-time, who often juggle family or work responsibilities and who may come from disadvantaged backgrounds and be exactly the kind of people that the Minister and most of us would want to help. 
 We have the assurance that the Minister is going to take the matter seriously. That for me is sufficient. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Tim Boswell: I beg to move amendment No. 261, in
clause 23, page 10, line 20, at end insert—
 '(5A) In imposing any condition under this section the funding body shall have regard to the position of disabled students.'.
 I hope not to prolong the discussion. This amendment on the position of disabled students is in a sense a mirror image of the discussion we have just had on part-timers. I have two or three initial points: the first is that there is a degree of coincidence between the two categories. I am not for a moment suggesting that all part-timers are disabled, but many disabled students need to study part-time because of the difficulties they find in managing other aspects of their life. As anyone who has been temporarily incommoded by the breaking of a limb will realise, it becomes much more difficult to get about and to carry out ordinary tasks and time has to be spent on them. 
 My second point, which flows on from that, is that there is an under-representation of disabled people in the higher education sector because of the difficulties they face. That is probably proportionately even more the case at the full-time level and it is also probably historically the case at some of the ancient and more prestigious universities—the Russell group or a group even more closely defined than that—partly because of the traditions of the place and partly often because of the appropriate adaptations. 
 The Minister will know that I was happy to move policy on by stealth—we had interesting debates at the time—and I was not wholly unrelieved not to have to make the final decision, which Ministers in the present Government have made, to incorporate education, especially higher education, into disability discrimination legislation. I am not saying that anybody wanted to prevent the policy, but we were all conscious of the pressures, especially on resources, that it might generate. The Minister may want to say something about how that is working in practice, bearing in mind that the duties on premises in relation to education will not come fully on stream until October 2005. 
 This is very important. People in the sector should take their responsibilities seriously. From my experience, the proposals are not impossible to achieve. We are talking about reasonable adjustments and making things practicably possible for people. As I have always said, when it comes to disability, the most important adjustments are mental adjustments, and thinking about ways of meeting the needs of individual students. Having been, by implication, slightly critical about past provision, I would like to say that there are many access officers, such as at Staffordshire university and the Russell group universities, who are working very hard to deliver a breadth of representation. 
 We still have a problem, however. There is the separate issue of disabled students grants. Those have been in place under the previous Government and this one. I do not suggest for a moment that they have got worse; they have been at the very least validated and in certain respects improved, which I welcome, and I suspect that this will not be a partisan matter for the Committee. In my experience, one of the nice things about disability issues is that people of all political shades of opinion unite on them. Often, however, too few members of the political classes become engaged in them, although they will become so if they have a constituency problem. Let us build on what we have to ensure that things get better. 
 I would like the Minister to be aware of one specific detail in relation to the enforcement of disability duties. Whereas in the schools statutory sector, enforcement can be done through the special educational needs tribunal, with further and higher education beyond the statutory sector, it can be done only through application to the court. Given that redress is more complex and legally risky, the Minister needs to monitor compliance in that sector too. 
 The ideal would be to produce an equality of access, in which disabled students are able to participate as fully as everybody else. Given that there are 8 million or 9 million disabled adults, the Minister can do the maths and realise that that means much higher participation in the student body than we have had historically. 
 I shall share one brief anecdote with the Committee. Some years ago when I was the Minister, I went to do a lecture tour—unrelated to my ministerial duties—in the former East German states that had recently joined the Federal Republic. One of the subjects that I was talking on was British higher education. It generated an extraordinary headline in The Times Higher Education Supplement of something like, ''British Minister goes to Halle in East Germany in order to be nice about British higher education—shock horror!'' 
 The point is that I met a wheelchair user at a lecture I gave in Magdeburg. He came up to me and said, ''I want to join British higher education. What do I do?'' My immediate response then, which I fear would be my response now, was, ''Write to the Open university, Walton hall, Milton Keynes, and they will sort you out.'' Participation in that university has always been high, and that is a strength of distance learning. 
 Given the Minister's access agenda, I am sure that he will be troubled at the relative difficulty that many disabled students still have, despite the grants, the legal duties and the good will of many in the sector. That leads on to the briefing that all Committee members will have received from Skill and the Royal National Institute of the Blind. I do not want to anticipate the full debate on the access regulator. However, there is a power for Ministers to require—indeed, they will require—the access regulator to report. The disability interests that have lobbied us suggest that it would be useful for the regulator to take a particular interest in the problems of disabled students—whether that is specified in the Bill or not—and to report on that, share good practice and take the issue forward. 
 This is a probing amendment. Judging from what the Minister said about my previous amendment, it would not be legally watertight, so I will not press it to a Division. The amendment touches on some concerns that are not the prerogative of any Committee member or political party, and I think that it may chime in with some of the Minister's personal concerns as well as those of the sector. 
 What I am really saying is that disabled students are very important, and entitled to the full range of options available to all other applicants to higher education; they are entitled to the support that will enable them to access it in full. We celebrate their success, which is often remarkable, and we are anxious to build on that. Anything that the Minister can do and any good will that he can show on this matter will be appreciated by disabled students and by Committee members.

Tim Collins: I rise to make a brief contribution consisting of two tributes, a clarification and a few questions for the Minister.
 The first of my tributes—perhaps expected, but certainly genuine—is to my hon. Friend the Member for Daventry. Not only has he secured the debate, but he was a doughty fighter for the interests of people with disabilities before 1997 and he has continued to be since. He has never approached such matters in a partisan spirit; he has always been prepared to see merits in his opponents and occasional flaws in his political allies because he has been genuinely interested in advancing the interests of a category of people who need the most powerful possible advocacy. I pay tribute to him for all that he has done. 
 My second tribute—perhaps less expected, but equally sincere—is to the Government. One of the best things that the Government have done since 1997 has been the creation of the Disability Rights Commission. They are to be commended for that very important piece of legislation. I am delighted to say that I spoke in support of it at the time of its introduction. The commission has done a lot of extremely valuable, good and worthwhile work. It is to be absorbed into what is likely to be called the single equality commission, and we hope that, under that new regime, those specialising in disability rights will be able to have at least as powerful a voice in the future as they have had in the past. 
 That leads on to the amendment and the implications of the needs of disabled students for the higher education sector. I record once again the appreciation at the way in which that I know many people outside the House, including some belonging to the two organisations to which my hon. Friend referred, have for the way in which the Minister replied to an earlier debate on these matters. Those people have been in further correspondence with the Minister, and they have asked those who tabled new clause 4 not to press it to a Division. We will not do so. However, as the Minister would expect, we will continue to monitor such matters. 
 Will the Minister answer a few questions? First, much of our debate has rightly been about widening access and increasing the social mix; about the terminology relating to social class, geography, wealth and expectation. I am sure that the Minister will accept that the category of disabled people is by definition a category of under-represented people, who have been denied the access appropriate for them. First, will the Minister make a statement recognising that such people need greater assistance, and need and deserve to have greater access and wider opportunity? 
 Secondly, building on a point made by my hon. Friend the Member for Daventry, will the Minister address himself to the question of physical access to university and other higher education institution buildings? My hon. Friend rightly pointed out that it is now only 18 months before the relevant legislation kicks in. In turn, that is only 12 months before top-up fees start, assuming that the Bill finds its way on to the statute book. What can the Minister say about the progress that has been made, what reports has he commissioned to monitor that progress, and will he keep a close and eagle eye on the situation? 
 My third question—I do not wish to prolong this important debate—is whether the Minister will make it a point to ask the committee of inquiry, to which he referred in a previous debate, to consider access for disabled students. He rightly pointed out that the inquiry's terms of reference cover part-time students, but it is not quite so clear that they would be expected to consider access for students with disabilities. I know that many disabled individuals and organisations would welcome a Government undertaking to ask the committee of inquiry to consider that specific issue and, if necessary, to make recommendations to ensure continuing progress on such matters, whatever other arrangements the committee and Parliament reach on top-up fees. It is a subject on which we can be sure of cross-party unanimity.

Alan Johnson: May I associate myself with the tributes paid by the hon. Member for Westmorland and Lonsdale—apart from the tribute to the Government, which I would be too blushingly embarrassed to accept. He is right that the hon. Member for Daventry has a tremendous record in dealing with disability issues. It is a great credit to him, and no surprise to us, that he should have raised the matter today.
 It is a probing amendment, but it is difficult to see how the general provision can work for HEFCE, because the definition in clause 23 is narrow and relates to controlling tuition fees in compliance with the general provisions of an access plan. Disabled students do have access problems, which I shall deal with in a moment. However, the amendment allows me to say in response to the first question asked by the hon. Member for Westmorland and Lonsdale that, yes, disabled students are under-represented. Together with ethnicity, it is something that the access regulator will consider. It is not only about social class. Indeed, the draft letter from the Secretary of State that we shall debate on Thursday refers to the matter. 
 Secondly, the hon. Member for Daventry asked about the effect of the Disability Discrimination Act 1995 in relation to physical access to buildings. One effect is that Act requires HEFCE to insist that higher education institutions publish disability statements at specified intervals. Another effect is the amount of capital funding that HEFCE has to provide in line with the 1995 Act. I am advised that between 2004 and 2006, £117 million of capital funding will be available, and all universities have submitted bids for that money. I shall check, but I presume that a large part of that covers the access issues raised by the hon. Member for Daventry. 
 Finally, the independent review will cover people with disabilities. It is mentioned in the draft terms of reference. 
 There is nothing between us on those issues, but it is worth mentioning to show how far we have come in helping disabled students. Applicants for the disabled student's allowance used to be subject to a means test. That was abolished in 1998. The DSA was extended to part-timers shortly afterwards; previously, the Open university—incredibly—did not benefit from it. In 2000, postgraduate students became eligible for DSA as well. 
 Most significantly, the availability of DSA awards has been publicised more widely. Previously, people with disabilities did not realise that the awards existed. The proof of the pudding is in the eating. As a consequence of that, the number of DSA awards made by local education authorities—they are not made by the Department for Education and Skills—increased from 710 in 1990-91 to 37,980 in 2001-02. Those are the latest figures that we have. That increase in the level of funding—from £1 million to £43.6 million—is extraordinary. We currently estimate that, rightly, we are spending £50 million each year on DSA. 
 There have been problems, however. That is why Skill performed the enormously invaluable task of helping us review the operation of DSA a couple of years ago. Almost all the recommendations that emerged from that review have now been implemented to the full satisfaction of Skill and other interested parties. Those achievements have been made with all-party support; it is bipartisan. We will continue to provide help for disabled students. 
 I hope that the hon. Member for Daventry will withdraw the amendment. It is based on the clear consensus that we need to continue to ensure that disabled students have access to university and higher education. That will be an important consideration when we discuss the access regulator.

Tim Boswell: I am grateful to my hon. Friend the Member for Westmorland and Lonsdale for an entirely inappropriate tribute. He also made some reasonable points in relation to the Government. I endorse what he has said. Most matters of social advance progress step by step, Government by Government. Gradually we get there.
 Access and support for disabled students was not a public issue a few years ago. No one did anything about it. Gradually, we realised that we needed to do more. It has been an all-party effort. We have done that. The mechanisms are in place. In the earlier short exchange, I did not give enough credit to Skill. It has been a highly professional body and has supported students. Its members have created a culture of protection and opportunity for individual students. The National Union of Students does not always get credit, but it has also dealt with that matter seriously. There is a huge measure of consensus and we need not prolong matters. 
 I will pick up on one matter that the Minister mentioned. He quoted the figures that were available for access to higher education premises. The Special Educational Needs and Disability Act 2001 modifies definitions of the mechanisms for delivery in the original Disability Discrimination Act. Those kick in next year. 
 The Minister quoted a figure of £175 million of spend. Anyone who has been involved in a spending Department knows that it is not always possible to calculate the whole of needs and arrange to fit them all. I wonder whether those funds will be sufficient, bearing in mind that case law will come along and that there will be test cases. Some institutions have not yet completed their appraisal. There will be further strain. 
 In seeking leave of the Committee to withdraw the amendment, it should be noted that the issue is hugely worth while and we all want to take such matters forward. We are prepared to spend public money. It is a good way to mutualise the cost of disability to ensure that we all make some contribution to that. I, for one, will sign up to that. 
 I am grateful for the way that the Minister has responded, so I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Chris Grayling: I beg to move amendment No. 112, in
clause 23, page 10, line 34, after second 'course', insert
'for which unconditional offers of places have been made to students after 1st April 2006'.

Jimmy Hood: With this it will be convenient to discuss the following: Amendment No. 77, in
clause 24, page 11, line 9, at end add—
 '(4) The Secretary of State shall exempt students who have an agreed deferred entry place for university in the academic year 2006-07 from paying fees that exceed the basic amount.'.

Chris Grayling: In debates such as this, there is much party-political repartee and there are ideological divisions, but the Committee also has a duty to try to improve the Bill and to remove from it things that could become injustices if they were enacted.
 If no other factors were involved, many young people who will reach the age of 18 and do their A-levels in 2004 would take a gap year; they would spend time in another part of the world learning a language, doing voluntary work and expanding their experiences. However, in 2005 students will have a very difficult decision to take. Under the current proposals, if they choose to take a gap year by deferring their entry to university until 2006, they will be among the first cohort of university students who are liable to pay top-up fees. They will have a disincentive to take a gap year at that time. There will be a financial imperative for them to take the decision to go to university straight away. I hope that Members of all parties share my concern about that. Some modifications must be made to ensure that that injustice does not occur.

Patrick Hall: Why will students and their families who face the prospect of not having to pay up-front fees see that as an injustice?

Chris Grayling: It is clear that, regardless of whether it is paid in arrears or in advance, many students will regard a fee of £3,000 as a greater deterrent than one of £1,000. Those students will have to choose whether to go to university in 2006 and, in doing so, to take on a much higher level of debt with, in many cases, an extension of the repayment term for many years and a dramatic increase in the amount that they repay.
 Recently, the Minister rightly picked me up on the issue of radiographers. I will offer a different example. A biology graduate might decide to work in a clinical research laboratory in the NHS. On the Minister's figures for average student debt, under the current student loan scheme the total interest and capital repayments that they would repay is about £12,500 and it would take about 12 years to pay that off. If one works through the figures using the current pay grades for that person, under the top-up fee scheme the amount to be repaid rises to £25,933 and the period in which it is paid off extends by about seven years. When young people make their plans in 2005 they will ask, ''It is going to cost me £14,000 more during my working life to pay off my debts if I take a gap year, so should I take one?''

Anne Campbell: As the hon. Gentleman is aware, I have always been very supportive of the Government's package of student support. What does he think will happen to the one third of students from lower-income families? Waiting for a year would be an attractive proposition for them because they will qualify for a grant, and they would not pay the up-front fee anyway.
 Sitting suspended for a Division in the House. 
 On resuming—

Anne Campbell: Before the Division, I was making the point to the hon. Member for Epsom and Ewell about poor students—those with families on incomes below £15,000—and the fact that they would be better off under the Government's proposals than under the current proposals.
 Sitting suspended for a Division in the House. 
 On resuming—

Anne Campbell: What I am about to say will hardly come as a surprise. Before the Division, I was saying that students from low-income families who are entitled to a full grant will probably prefer to defer for a year, so that they have a gap year when otherwise they may have not chosen to do so.

Chris Grayling: I am delighted that the hon. Lady has had the chance to make her point. She is clearly a candidate for the longest intervention in recent years. She has made an important point about freedom of choice. There is no practical reason why, if someone wants to defer to the new regime, such action should be objected to. Under the Bill as currently articulated, the choice does not work the other way round. If people want to take advantage in 2005 of the current system, they would have to miss their gap year. There are several consequences of such action. Is that a good step to take?
 The Minister will know that in 1998 the Government set a precedent for taking steps that would allow the gap year issue to be resolved. They were then persuaded that there were disadvantages if special arrangements were not made for students who wished to take a year out. They agreed that, in the year before the introduction of the current basic fees, students who sought to defer their entry to university by one year to take a year out would be treated as though they had entered university at the usual time and would be exempt from payment of the fees. It is not unreasonable to ask the Government to take the same action again. 
 I am not talking only about the deterrent effect, which clearly exists. A survey was undertaken of five sixth forms in the Bath area and they were asked about the impact of top-up fees on their decisions to take a gap year. Nearly two thirds of them—57 per cent.—said that that would be a tangible deterrent to their taking a gap year. The problem is that the consequences go much further than the loss of a gap year. I am sure that the Minister recognises that the number of those young people who take a gap year has been rising sharply. When the issue first arose, about 20,000 asked to defer their university entry until 1998. 
 In 2002, 29,100 students were accepted as deferred applicants by the Universities Colleges Admissions Service. 
 The number of young people taking gap years is increasing. They are an important source of volunteer work for organisations such as the Prince's Trust, Voluntary Service Overseas and so on. There is a genuine beneficial social reason for allowing them to take such action. There are also other issues.

Graham Allen: I am interested in the benefits to which the hon. Gentleman referred. Does he consider that kids from lower socio-economic groups who have to work after leaving school at 16 years old and who go on to further education thereafter should benefit from a gap year, too? How might that be funded, given that they do not have the resources to do it themselves?

Chris Grayling: Surely the point is that it is beneficial for anyone, of whatever age, to take a gap year. Gap years are universally self-funded; no young or older person taking a gap year is funded by anyone else. The point is not that there should be a special financial deal to support them in their gap year, but that the transition from the old regime to the new one will create a disincentive to take gap years in one particular year group. There are three consequences of that.

James Clappison: We all understand the concerns of the hon. Member for Nottingham, North, but is not his point entirely fair? It is not a question of people being funded to take a gap year, but of whether they will be worse off and suffer a disincentive to take a gap year as a result of these proposals. Is it not likely that even taking into account the help from individual universities, about which the Government have told us—as well as the Government's help—there will still be a substantial number of students from middle, lower middle and lower income groups who are worse off?

Chris Grayling: My hon. Friend is right. I hope that the Government will address those issues, because there are simple ways to deal with them.
 As I said to the hon. Member for Nottingham, North, there are three reasons for concern about gap years. The first is the impact on young people who would otherwise take a gap year but do not. Regardless of the other social issues that he describes, it is surely a good thing for young people to take a gap year, because there is a developmental benefit for them. Why should there be a real disincentive for one year group—one school year—to take a gap year? That is not right, especially when the Government wisely set a precedent four or five years ago, when this issue first arose, and created an exception to allow those taking a gap year to continue to do so.

Graham Allen: I do not disagree with the hon. Gentleman. All I am trying to point out is that certain people can currently take a gap year—perhaps because of family income—but a vast swathe of people out there do not have the choice and possibly do not access the benefits of a gap year. We must deal with that
 question; otherwise it would look as though we were defending a relatively privileged group of people over the rest of society.

Chris Grayling: I am sorry but I do not accept the hon. Gentleman's premise. It is rather like saying that because a large number of people do not go to university, and will never do so, we should not be debating universities.

Tim Boswell: I do not imagine it is being suggested—I suspect that not even the hon. Member for Nottingham, North is suggesting—that the access regulator should be imposed on the gap year provision. However, having said that, I have visited some of the gap year organisations. Does my hon. Friend agree that they have the strongest possible interest in widening access to their services for all kinds of people? It is by no means universally a middle-class provision—nor should it be.

Chris Grayling: My hon. Friend's comment ''Nor should it be'' is right. None of us wants to deprive anyone from any social background of the opportunity to take a gap year. It is a good thing for any young person. Certainly in an era of widening participation it is a good thing if someone going to university from a non-traditional background can take a gap year.

James Clappison: Can we take the bull by the horns with regard to what the hon. Member for Nottingham, North is saying? Is it not likely that wealthy families will pay even the increased level of student fees, so there will be no disincentive for students from those families? The students who will be squeezed out of gap years are those on middle and lower middle incomes. That goes quite a long way down the income range.

Chris Grayling: As ever, my hon. Friend makes an important point. It is always the people in the middle who are squeezed.

Graham Allen: The hon. Gentleman talks about a gap year, but most of the youngsters in my constituency would regard that as the name of the store they have to work in to raise some money to go to university. I hope that he looks again at this question. It is rather like my hon. Friend the Member for Leeds, East (Mr. Mudie) saying that everyone can dine at the Savoy. We shall have to facilitate that provision; otherwise it would seem as if the concept that the hon. Gentleman is putting forward is designed for a group of people in society, rather than for everyone. He has undoubtedly made an eloquent case, but if he wishes people to have a genuine choice—as I am sure he does—he must address how we facilitate that for youngsters who may not be able to go to university and allow them to enjoy the benefits if they leave school at 16 or go into FE.

Chris Grayling: The hon. Gentleman is once again taking us off the point. I want to leave a few moments for the Minister to make some comments.

David Chaytor: Will the hon. Gentleman give way?

Chris Grayling: I will not because I want to let the Minister get in.
 I would like briefly to make two points. First, the Minister will be aware of the potential impact of a shakedown on university admissions. If in 2005 a bubble of people who might otherwise be entering university in 2006 take a gap year, that will have a potential knock-on effect for the universities. He must take that factor into account. Secondly, many young people defer entry to university or change the nature of their university entry once they have received their A-level results. Many young people, particularly those from non-traditional backgrounds, who discover that they have done better than they thought they would in their A-levels will lose the opportunity to reapply for a better university the year after. 
 We have put forward an amendment that we think represents the fairest way of solving the problem. Any young person who gets an unconditional offer before April 2006—we have picked April because the UCAS process is over by then—would be able to enter as if they had entered university in 2005. We think that that is fair. I hope that the Minister can accept this simple amendment; the Government did so four years ago, and I hope that they will now do so again.

David Rendel: I will be brief, because obviously very little time is left. I have an even better answer to the point made by the hon. Member for Nottingham, North. Pupils from poorer backgrounds will lose out because of the change that the Government are making. That will happen because for every person who is crowded out of a gap year, someone will be crowded out of a university place. That is an even more important problem to be found with what is happening. If it is true that most of the people who are or who could be going on gap years during that vital transitional year will come, as suggested by the Government's figures, from the independent school sector and from the richer, more prosperous parts of our country. All those people will get the places at university during the transitional year and others, who perhaps do not come from such wealthy backgrounds, will not get a place at all. It is for their sake that it is important we deal with that transitional problem.

Alan Johnson: The hon. Member for Newbury is fundamentally wrong about the incentives. The hon. Member for Epsom and Ewell said that there was a deterrent effect. The point that my hon. Friend the Member for Cambridge was making in her three-part intervention was that there is a positive incentive to take a gap year for the very students the hon. Member for Newbury is talking about.

David Rendel: The Secretary of State for International Development does not agree. He said he recognised that the increase in university fees planned for 2006 may well influence the choices of students who have confirmed university places in 2005 but would otherwise have taken a gap year.

Alan Johnson: I am not sure whether the hon. Gentleman means the present Secretary of State for International Development, or the previous one. If it is the previous one, the fact that she disagrees with me is a point in my favour.
 My point is that, unlike in 1998, students have the incentives of the end of up-front fees, bigger loans, higher grants—the grant of £2,700 kicks in in 2006—the 25-year cap on repayment and bigger bursaries. If youngsters thinking of going to Cambridge, Exeter or Imperial, for example, take a gap year, they will have £4,000 a year, £2,700 from us. They could miss out on £11,000 a year.

Tim Collins: On a point of order, Mr. Hood. I apologise for interrupting the Minister, but will you confirm that when the knife falls at 8 o'clock and the remaining six clauses are not debated, those of us who have an objection in principle to clause 29 and the creation of OFFA will have to vote against the whole group from clause 24 onwards in order to register that objection?

Jimmy Hood: It is correct that once the business relating to clauses 23 and 24, which contain Government business, has been put, clauses 25 through to schedule 5 will be put on the block.

Alan Johnson: The hon. Member for Epsom and Ewell also mentioned what we did in 1998. Indeed, the Liberal Democrat amendment repeats the exact words. Things were different in 1998. It was not until the Dearing report was published in 1997, and we accepted it in that year, that students knew they were going to have to pay a fee. Now, they have had three years' notice.
 It being Eight o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 June 2001 and 6 November 2003] and the Order of the Committee [10 February and this day], to put forthwith the Question already proposed from the Chair. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 8, Noes 14.

Question accordingly negatived. 
 The Chairman then proceeded to put forthwith the Questions necessary to dispose of the business to be concluded at that time. 
 Amendment proposed: No. 110, in 
clause 23, page 10, line 35, at end insert 
 'but excludes any year of education beyond the first three years of a course in medicine, veterinary medicine or education'.—[Mr. Collins.] 
 Question put, That the amendment be made:—
The Committee divided: Ayes 8, Noes 14.

Motion made, and Question put, That the clause stand part of the Bill.
Question put:— 
 The Committee divided: Ayes 13, Noes 9.

Question accordingly agreed to. 
 Clause 23 ordered to stand part of the Bill.

Clause 24 - Regulations under section 23(6) relating to basic or higher amount

Amendments made: No. 148, in 
clause 24, page 11, line 1, leave out from 'section' to end of line 6 and insert— 
 '(a) no regulations may be made increasing the basic amount unless— 
 (i) the Secretary of State is satisfied that the increase is no greater than is required to maintain the value of the amount in real terms, or 
 (ii) a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament, and 
 (b) no regulations may be made increasing the higher amount unless— 
 (i) the Secretary of State is satisfied that the increase is no greater than is required to maintain the value of the amount in real terms, or 
 (ii) a draft of the regulations has been laid before each House of Parliament and has been approved after 1st January 2010 by a resolution of each House of Parliament.' 
No. 149, in 
clause 24, page 11, line 7, leave out '(2)(a)' and insert '(2)(a)(i) and (b)(i)'.—[Alan Johnson.] 
 Motion made, and Question put, That clause 24, as amended, and clauses 25 to 29 stand part of the Bill, and that schedule 5 be the Fifth schedule to the Bill:—
The Committee divided: Ayes 13, Noes 9.

Clause 24, as amended, ordered to stand part of the Bill. 
 Clauses 25 to 29 ordered to stand part of the Bill. 
 Schedule 5 agreed to. 
Further consideration adjourned.—[Derek Twigg.] 
 Adjourned accordingly at six minutes past Eight o'clock till Thursday 4 March at ten minutes past Nine o'clock.